GAIL seeks entry into Chinese gas market
Friday, 17 December 2004, 20:30 IST
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NEW DELHI: State-owned gas infrastructure major GAIL (India) Ltd is seeking an entry into the Chinese city gas market through equity stake in a Chinese distribution company operating in nine cities. "The China Gas Holding Company may be offering us 10 percent equity stake. So far we have had limited negotiations," GAIL chairman and managing director Proshanto Banerjee told media here Friday. The Indian gas major has so far signed the confidentiality clause on negotiations with China Gas. GAIL, which is engaged in similar projects in New Delhi and Mumbai, has also made a foray overseas in Egypt through equity stake in two gas distribution companies. GAIL sees good prospects for growth in the Chinese market as China Gas company is planning to expand operations to 40 cities and also in Beijing. Focusing on residential, industrial and commercial users, the Chinese company has already formed joint ventures for various cities. The volume of business handled by it so far is not very large. China accounting for over 11 percent of global energy consumption has been one of the reasons for higher global off-take and higher crude prices. China is also aggressively seeking oil and gas equity to ensure security of supplies and sustain its high economic growth. The Chinese company has approached GAIL through its consultants PriceWaterhouseCooper for possible participation. "The talks are still in the preliminary stage and the level of investment and equity holding is still to be decided. By March we should be in a position to know about our participation in the Chinese project," Banerjee said. He disclosed that GAIL was also seeking further projects overseas for exploration and gas distribution, including in Iran and Myanmar among others. "We have already started getting dividend from our investments in Egypt city gas distribution from the first year itself," Banerjee said. "We have once again resumed discussions with authorities in Iran for starting city gas services in a couple of Iranian cities." In India, GAIL is looking to beef up its supplies of gas by importing liquefied natural gas (LNG) to expand supplies to more cities and expand its city gas operations. While negotiations are on to source LNG and natural gas from Iran and other West Asian countries, GAIL is also looking at other countries like Australia, Malaysia and Indonesia. "Sourcing from these countries is part of the strategy not to depend on one region. We are already talking to Malaysian, Australian and Indonesian authorities for supplies of LNG," Banerjee said. GAIL has not yet finalised whether it would set up its own terminal for re-gasification of LNG on arrival in India, or use the existing Petronet LNG terminal at Dahej in Gujarat in which it too is a partner or use any of the other terminals coming up.
Source: IANS
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