The Hindu Business Line : Gail in talks for 22 pc stake in Egypt's NatGas

Mr Proshanto Banerjee, CMD, GAIL (right), with Mr J.K. Jain, Director, Finance, addressing a press conference in the Capital on Wednesday. — Kamal Narang

New Delhi , May 5

GAIL (India) Ltd is in negotiations to acquire a 22 per cent stake in Egypt's largest city gas distribution firm, NatGas. It is also eying the prospect of acquiring British Gas' entire holding (45 per cent) in Nile Valley Corporation. EK Holdings, which is selling 22 per cent stake in NatGas, has made it clear to Gail that it cannot negotiate any other acquisition until the NatGas deal is firmed up or turned down. Hence, any progress on the Nile Valley deal will have to wait for the outcome on the NatGas deal.

"Opportunities in NatGas and Nile Valley Corporation in Egypt are being explored," Gail Chairman and Managing Director, Mr Proshanto Banerjee, told presspersons here on Wednesday.

EK Holdings, a Kuwait-based diversified firm, is negotiating to sell 22 per cent of its 67 per cent stake in NatGas to Gail. The other major stakeholder in NatGas includes Shell, which has a 20 per cent stake. "The stake could be worth Rs 16 crore to Rs 17 crore," a senior Gail official said. Gail hopes to complete the NatGas deal this fiscal.

Gail had earlier bought Shell's 19 per cent stake in Fayum Gas, Egypt, and 22 per cent in Shell CNG, Egypt for about Rs 11 crore. The two companies have so far paid $0.5 million dividend to Gail. Gail is also in talks with the Philippines for acquiring oil and gas exploration blocks, laying pipelines and CNG business, Mr Banerjee said.

On the petrochemicals front, Mr Banerjee said that Gail will expand capacity of its Pata Petrochemical unit to 440,000 tonnes per annum from 260,000 tonnes per annum. This will be achieved by April 2006 at an investment of Rs 647 crore. "We are targeting production of one million tonnes of petrochemicals in five years from expansion, equity stake in other units, imports and foreign investment," he said here in a presentation to the media.

Gail also plans to top up the 8,000-km of fibre optic network in north-western India and Mumbai-Hyderabad-Vizag route. It plans to set up a network on the 3,000-km Bangalore-Chennai-Vijayawada line at a cost of Rs 750 crore to Rs 1,000 crore, he added.

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