GAIL mulls Shell equity offer in Egypt

Wednesday, 02 April 2003, 20:30 IST
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NEW DELHI: Infrastructure major Gas Authority of India Limited (GAIL) is mulling Royal Dutch/Shell's offer of equity in two of its Egyptian companies that distribute city gas. GAIL posted a 32 percent increase in net profit in fiscal 2002-03. Shell has offered 19 percent equity in the Fayum Gas Company and 10 percent in Shell CNG Company, GAIL Chairman and Managing Director Prashanto Banerjee said here Wednesday. Fayum handles the supply of piped natural gas (PNG). Shell CNG hopes to expand its infrastructure for supplying compressed natural gas (CNG) as automotive fuel. "Our technical and legal experts team is expected to leave for Egypt by this weekend to study the proposal. We are very interested in joining hands with Shell, as it would be a good alliance in our efforts towards globalisation," said Banerjee at press conference to announce the company's performance and future plans. GAIL has ended the 2002-03 fiscal with a provisional net profit of 15.65 billion against 11.86 billion for the previous year. The main contribution to the increased turnover has been from the increased volume of gas handled from the Krishna-Godavari basin fields, higher sales of polymer and cooking gas or LPG, LPG handling through the Jamnagar-Loni pipeline systems and sale of other liquid hydrocarbons, said Banerjee. GAIL has been receiving several offers from overseas to utilise its expertise in city gas distribution and supply of CNG, with New Delhi having become the only city in the world where the entire public transport fleet runs on the green fuel. "Shell is keen to use GAIL expertise in creating, maintaining and operating CNG outlets, given our experience in Delhi. While some infrastructure exists in Cairo, these would need to be expanded," said Banerjee. Shell has also mooted an alliance with GAIL to transporting CNG by ship to India, which faces a growing gap between the demand and supply of gas. As a part of the globalisation initiative, GAIL has signed pacts with the National Iranian Oil Company (NIOC), the Iranian Fuel Conservation and Optimisation Company (IFCO) and the National Iranian Gas Exporting Company (NIGEC) for export of gas to India via pipeline or through the new Coselle technology for shipping CNG. GAIL is already in agreement with the National Petrochemicals Company of Iran for joint marketing and export of gas. "We have also carried out a feasibility study funded by the Asian Development Bank (ADB) to introduce CNG in Dhaka. ADB has commissioned GAIL to carry out a pipeline rehabilitation study in Afghanistan too. In addition, memorandums of understanding have been signed with Institut Francais du Petrole, Gaz de France and Korean Gas Corporation (KOGAS) for CNG distribution. Turkish Pipeline Transportation Directorate (BOTAS) has also signed a similar agreement," disclosed Banerjee. Within the country, GAIL is seeking to become the nodal agency for transporting and marketing gas and is making substantial investments on a new network of pipelines. "A route survey has been carried out for all the sectors and an investment of 200 billion has been planned for the next five years," said Banerjee.
Source: IANS