GAIL sets up overseas investment subsidiary

GAIL (India) Ltd has set up a wholly owned subsidiary in Singapore, christened Gail Global (Singapore) Pte Ltd, to undertake overseas investments.

The subsidiary will make an investment for acquisition of 15 per cent equity stake in Egyptian National Gas Company (NatGas) "" one of the largest distributing companies of natural gas in the private sector in Egypt, a company release said here.

After ONGC Videsh Ltd, GAIL's subsidiary would be the second entity promoted by a state-owned oil or gas company for its foray overseas.

The shares will be acquired from Egypt Kuwait Holding Company in Egypt which currently holds 67 per cent of the shareholding of Natgas. Shell, with a shareholding of 18 per cent is another shareholder in Natgas. GAIL has already secured participation in two retail gas companies in Egypt - Fayum Gas Company and Shell CNG. The first dividend from Fayum Gas Company of an amount of $0.56 million has already been received. An investment of $22 million (Rs 100 crore) has been made in Egypt.

In addition to this, commercial gas discovery has been made in the A-1 block in Myanmar with estimated reserves of 6 tcf (trillion cubic feet).

The Ministry for Energy, Government of Myanmar, has confirmed Gail as the preferred buyer for the gas from the A-1 block. The Government of Myanmar is actively considering participation of GAIL in the A-3 block. GAIL is also at an important stage of negotiation with National Iranian Gas and Energy Corporation for finalising the terms to source 5 mmtpa LNG from Iran.

GAIL has global business interests in countries such as Egypt, Turkey, the Philippines, Iran, Bangladesh, Myanmar and United Kingdom in the sphere of exploration and production, gas transmission, CNG and city gas distribution, LNG and petrochemicals.

As part of its globalisation plans, GAIL is also looking at other African and West Asian countries and is keen to associate with Egypt Kuwait Holding Company and other players in cross-country gas pipeline projects in countries such as Syria, Jordan and Lebanon. GAIL has already offered to share its expertise in cross-country pipeline operations and city gas distribution in the UK.