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GAIL to distribute gas in Egypt
Monday, 03 November 2003, 20:30 IST
NEW DELHI: India's gas infrastructure major GAIL (India) Ltd hopes to finalise deals for gas distribution in Egyptian cities to commence it global operations.
"We have completed the due diligence study of the project and hope to clinch the deal for city gas distribution in Egypt by December. We expect to take 20 percent equity stake in a Shell CNG Company and another 19 percent equity in Fayum Gas Company," GAIL chairman and managing director Prashanto Banerjee told reporters Monday.
The cooperation with Royal Dutch/Shell Group is part of a memorandum of understanding (MoU) signed this year for exploring opportunities in overseas markets.
Under the MoU, Shell and GAIL have agreed to cooperate in the fields of exploration and production, compressed natural gas (CNG) distribution, sharing technology for transportation of CNG by ships and pipeline infrastructure.
GAIL is also studying two other opportunities for exploration and distribution of gas in Egypt.
"We are looking at taking an equity stake in the deep sea offshore block Nemed in north Mediterranean, which is being operated by Shell and Petronas. We are examining offer of taking a 15 percent stake in the block," said Banerjee.
As Shell and Petronas, the national oil company of Malaysia, had already spent around 
480 million on the farming-in of the offshore block, GAIL is working out the modalities of its investment in the block on taking an equity stake.
"We are not keen to take on the commitment to contribute towards funds already spent on the block as future investment commitments on equity participation in the block are expected to be substantial," B.S. Negi, GAIL's director planning, told IANS.
Total initial investment in the offshore block, which is expected to yield rich returns, is likely to be around $20 million.
Shell has also offered GAIL a stake in Netgas, a gas transmission project it is planning with a local Egyptian partner.
GAIL's net profit rose 33 percent in the July-September quarter to 4.87 billion, which is 20 percent higher than the net profit in the corresponding period last year.
Controlling 85 percent of the domestic market, GAIL's growth in profits has "been mainly contributed by the increase sales volume of natural gas, LPG or cooking gas and other liquid hydrocarbons as well as reduction in the interest cost of loans".
On the Iran front, Banerjee said a decision for bringing pipeline gas to India is likely by June 2004 once the techno-feasibility study is over.
"The survey of the pipeline (via offshore route) by Italy's Snamprogetti has been completed and we expect it to come up with the techno-feasibility report by June 2004. After June we will be in a better position to decide on the Iran-India gas pipeline," said Banerjee.
Facing a growing shortfall in meeting gas demands, India is exploring various options for enhancing supplies through indigenous exploration and production, import of liquefied natural gas (LNG) and pipeline gas from neighbouring countries.
The first of LNG imports are slated to begin from beginning of next year after the first receiving and regassification terminal at Dahej in Gujarat becomes operational in December.
Source: IANS
480 million on the farming-in of the offshore block, GAIL is working out the modalities of its investment in the block on taking an equity stake.
"We are not keen to take on the commitment to contribute towards funds already spent on the block as future investment commitments on equity participation in the block are expected to be substantial," B.S. Negi, GAIL's director planning, told IANS.
Total initial investment in the offshore block, which is expected to yield rich returns, is likely to be around $20 million.
Shell has also offered GAIL a stake in Netgas, a gas transmission project it is planning with a local Egyptian partner.
GAIL's net profit rose 33 percent in the July-September quarter to 4.87 billion, which is 20 percent higher than the net profit in the corresponding period last year.
Controlling 85 percent of the domestic market, GAIL's growth in profits has "been mainly contributed by the increase sales volume of natural gas, LPG or cooking gas and other liquid hydrocarbons as well as reduction in the interest cost of loans".
On the Iran front, Banerjee said a decision for bringing pipeline gas to India is likely by June 2004 once the techno-feasibility study is over.
"The survey of the pipeline (via offshore route) by Italy's Snamprogetti has been completed and we expect it to come up with the techno-feasibility report by June 2004. After June we will be in a better position to decide on the Iran-India gas pipeline," said Banerjee.
Facing a growing shortfall in meeting gas demands, India is exploring various options for enhancing supplies through indigenous exploration and production, import of liquefied natural gas (LNG) and pipeline gas from neighbouring countries.
The first of LNG imports are slated to begin from beginning of next year after the first receiving and regassification terminal at Dahej in Gujarat becomes operational in December.
Source: IANS