Financial Daily from THE HINDU group of publications
Friday, Oct 10, 2003
Financial Daily from THE HINDU group of publications Friday, Oct 10, 2003 |
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Corporate
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Restructuring GAIL to unbundle sourcing, marketing Our Bureau
Mr Prashanto Banerjee, Chairman and MD, GAIL India Ltd, with Mr S.K. Jain, Director- Finance, addressing presspersons in Mumbai on Thursday. - Paul Noronha
Mumbai , Oct. 9 GAIL India Ltd plans to unbundle its gas sourcing and marketing business into a separate company in the long run. Mr Prashanto Banerjee, Chairman and Managing Director, told reporters on Thursday that GAIL's gas sourcing and marketing business will first be separated into a strategic business unit and be converted later into a subsidiary which in turn will be spun off into a different company. Mr Banerjee did not specify any timeframe. GAIL officials on Thursday made a detailed presentation on the company's proposed national gas grid. The proposed 7,890-km gas grid is expected to span across most Indian States connecting the upcoming LNG terminals on the west and east coasts with potential consumers across the country. It envisages investments worth Rs 20,000 crore. "These pipelines will make available capacity to gas sellers as a common carrier. As per the draft of the gas pipeline policy, the grid will offer open access to all players at competitive prices," said Mr Banerjee. Surveys for determining pipeline routes will be completed by 2004. The entire network will be completed in five phases between 2003 and 2008. Open access tariff will be decided on a cost of service principle. The grid will be funded through internal resources, bond issues and borrowing from financial institutions. Mr Banerjee said gas imported at Petronet LNG's Dahej terminal would find takers amongst GAIL's existing customers. GAIL, partner in PLL, said gas imported from RasGas, Qatar, will be marketed at a price of $3.5-$4 per mmbtu. This is higher than the price of $3 per mmbtu sought by most gas consumers. In talks with Reliance: GAIL India is in "dialogue" with Reliance Industries for transporting gas from its K-G basin gas find to other parts of the country through the gas grid, Mr Prashanto Banerjee, CMD, GAIL, said on Thursday. Mr Banerjee said GAIL is also in talks with other gas sellers such as Gujarat State Petroleum Corporation and ONGC for transmitting gas through its proposed grid. GAIL plans to be the main player building the national gas transmission infrastructure. "Multiple agencies creating an operating different parts of the national grid will lead to confusion and chaos," Mr Banerjee said.
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