GAIL signs pacts with three Chinese companies

Our Corporate Bureau
13 January 2006

GAIL India has signed MoUs with three Chinese companies — China Petrochemical Corporation (SINOPEC), CNOOC International Ltd and the Beijing Gas Group Company Ltd (Beijing Gas Group). The MoUs were signed during the visit of the high level Indian delegation to China, led by Mani Shankar Aiyar, minister of petroleum and natural gas. The GAIL team was headed by CMD Proshanto Banerjee.

GAIL and SINOPEC will cooperate in the oil and gas upstream sector including oil and gas exploration, development and production, within China, India and in other countries. The cooperation between the two companies covers transfer of assets, joint acquisitions, joint development of oil and gas projects and exchange and optimisation of assets.

The two companies will also explore opportunities to cooperate in the LNG sector, including LNG trading for the Indian and Chinese market, joint investment of LNG receiving and regasification facilities in India and China, participation in the LNG supply chain. The two companies will also undertake high volume transportation of natural gas and CNG to remote areas and from one country to another; collaboration in research and development; exchange visit of experts and training of personnel.

Sinopec is a Chinese state-owned integrated energy and petrochemical company, and has a number of subsidiaries involved in oil and gas exploration, production, crude oil refining, petrochemical manufacturing, petroleum and petrochemical products marketing and distribution, R&D and engineering services. IT seeks to emerge as an internationally competitive multinational with prominent core businesses, quality assets, diversified equity structure, innovative technologies, advanced management and sound financial practice.

Another company with which GAIL has signed an MoU is CNOOC International Ltd, a subsidiary company of China National Offshore Oil Corporation (CNOOC). The agreement between the two covers cooperation in exploration and production. GAIL and CNOOC will and jointly bid for exploration blocks in the bidding rounds of exploration blocks and jointly secure 'farm-in' options in already awarded exploration blocks. The two companies will participate in the LNG supply chain for new projects as well as expansion of existing facilities with an equity interest in the linked gas E&P.

They will also consider acquisition opportunities in the field of natural gas and its related sector, and collaborate in R&D activities in the natural gas and related sectors.