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Rediff.com  » Business » Gail offered 15% stake in gas field in Egypt

Gail offered 15% stake in gas field in Egypt

September 24, 2003 16:32 IST

The world's third largest oil firm Royal Dutch/Shell has offered state-run gas firm Gail (India) Ltd a 15 per cent stake in an offshore medium sized gas field in Egypt.

"Shell has offered us a minority stake in an exploration block in Egypt. We are evaluating the proposal," Proshanto Banerjee, chairman and managing director, Gail, told reporters in New Delhi on Wednesday.

Gail is evaluating the participation in natural gas exploration and production, and planning city gas projects in several countries to expand its international operations.

Without giving further details, he said the offer was part of the memorandum of cooperation Gail signed with Shell in January this year for importation of LNG and development of import facilities, development of pipeline infrastructure, marketing of regassified LNG and CNG transportation by ship.

Gail, which already has a 10 per cent stake in the A-1 gas field off Myanmar's northwestern coast, is also talking to Shell for picking up stake in two city gas distribution companies in Egypt.

"Shell has offered us 19 per cent equity in Fayum gas company and 10 per cent equity in Shell CNG company (both in Egypt). The financial, legal and technical due diligence study for both have been completed and valuation and other terms and conditions for investment were under preparation," he said.

The Fayum gas company supplies piped natural gas for domestic consumption, while Shell CNG retails compressed natural gas to the automobiles in Cairo.

Besides, Gail is evaluating the feasibility of participation in another gas distribution company in Egypt, Natgas, Banerjee said, adding British Gas has also offered equity participation in its gas distribution company in Brazil.

The company is also eyeing a stake in the oil and gas exploration blocks in Argentina and Mozambique. Shell has offered the Indian firm a minority stake in an exploration block in Argentina.

Gail, which has signed an agreement with Botas of Turkey for helping it set up city based gas distribution system and CNG network for automobiles in Istanbul and Ankara, is eyeing CNG distribution projects in Manila and Philippines, Banerjee said.

He said the foreign operations might account for 15 per cent of Gail's turnover in the next 10 years when the firm's total revenues should double to Rs 20,000 crore (Rs 200 billion).

Gail had also prepared a detailed feasibility report for a city gas project in Dhaka in neighbouring Bangladesh, and is in talks for similar projects in Cairo, Manila, Istanbul and the Iranian city of Isfahan, he said.

It has also offered to lay BAT MAN I & II gas pipelines in Phillippines. The 100-km BAT MAN-I pipeline connects indigenous gas supply source to the market, while BAT MAN-II pipeline is 140-km in length and connects the upcoming LNG terminal.

"Given our expertise in pipeline projects, Gail had offered to Philippines National Oil Company to take up this project right from the feasibility report stage," he added.

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