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GAIL's global plan gathers steam

October 25, 2007 13:33 IST
To extend its global footprint, GAIL India is likely to partner with China Gas in developing coal bed methane (CBM) in Mongolia. Moreover, Oman Oil is also expected to join them as an ally in the project.

Furthermore, the country's largest gas transportation and marketing company is also eyeing gas distribution projects in Uzbekistan and may buy oil and gas exploration blocks in the central Asian country.

GAIL holds 6.57 per cent stake in China Gas, while Oman Oil holds 7.44 per cent stake. "We are considering various projects in partnership with China Gas," said a senior GAIL official, adding that the proposals were in line with the company's overseas policy.

GAIL has stakes in two gas blocks in Myanmar and is also present in gas projects in Egypt - through stakes it owns in three gas companies. The gas utility has also firmed up its plans to set up a mega petrochemical plant in Iran.

China Gas last month signed an agreement with the Mongolian government to explore and extract coal bed methane in the Nalinhe region in the coal-rich Inner Mongolia. The initial exploration area will be 600 sq km. China Gas has already drilled two appraisal wells.

Early this year, GAIL and China Gas had set up a 50:50 joint venture - Zhongyin Energy Company - to set up city gas distribution networks, including gas distribution to households, industrial users and vehicles, in China.

GAIL is also in talks with Uzbekistan national petroleum holding company - Uzbekneftegaz - to set up a joint venture company to supply gas to households and vehicles in that country.

"We are looking at exploration and production, gas processing and city gas distribution in Uzbekistan," the GAIL official said. 

"We are in constant touch with Uzbekneftegaz. Progress has been slow; but the talks are moving in a positive direction," the GAIL official added.

It is reported that Uzbekneftegaz has already got the government nod for the joint venture. He said GAIL would enter the city gas distribution project in Uzbekistan.

If it gets into city gas project, GAIL is likely to tie-up with Uztransgaz, a fully owned subsidiary of Uzbekneftegaz engaged in the gas marketing and transportation, for distributing compressed natural city to vehicles and piped gas to households in Tashkent, Samarkand and Bukhara, three of the biggest cities in Uzbekistan.

Oman Oil is also developing CBM blocks in Oman.   Coal bed methane is a form of natural gas found on top of coal deposits and within coal seams.

Uzbekistan is estimated to have 594 million barrels of proven oil reserves. It is also the second-largest gas producer among the erstwhile Soviet Republics and one of the top 10 natural gas producing countries in the world. On the domestic front, the company has three CBM blocks in Jharkhand and Chattisgarh.

 The government-owned company has shown interest in entering city gas projects in West Asia and Africa. The company, through joint ventures companies, Indraprashtha Gas and Mahanagar Gas, distributes gas to retail customers in Delhi and Mumbai.

Rakteem Katakey in New Delhi