GAIL to ink three gas supply JVs for Chinese cities

New Delhi, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
Domestic gas major GAIL (India) Limited will set up three new joint venture (JV) companies with China Gas Holdings Limited (CGHL) to undertake CNG and city gas distribution projects in Wuhu, Huainan and Yichang cities in the eastern part of China. GAIL chairman and managing director Proshanto Banerjee, currently in China, is likely to ink agreements with CGHL for these new JVs.

Early this year, GAIL became Indias first oil & gas public sector unit (PSU) to enter China by picking up a 10% equity stake in China Gas Holdings. China Gas holds concessional rights for setting up and operating CNG and city gas distribution projects in 48 cities and provinces in China.

Sources said GAIL was also exploring opportunities to widen its operations in China. It has lined up plans to have talks with SINOPEC, the integrated national oil and gas company of China, to form strategic partnerships in gas sector activities and in exploration and production (E&P) areas, particularly in West Asia and Africa.

CGHL is forming a number of joint venture companies to implement CNG and city gas projects in every city and province. CGHL has invited GAIL to be a JV partner in three cities. Wuhu and Huainan are situated in the Anhui province while Yichang is in the Hubei province, sources say.

China Gas, a company listed on the Hong Kong Stock Exchange with a market capitalisation of around $290 million, has been given monopoly operating rights in Chinas gas sector. Around 50% of the companys equity is with the public and the balance is being held by China Gas, Sinopec and GAIL.