The Hindu : Business : China Gas, GAIL form JV

Online edition of India's National Newspaper
Wednesday, Jun 27, 2007
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Business

China Gas, GAIL form JV

Special Correspondent

To work on modular LNG systems

Two directors from each co. will be on the board
CNG, CBM projects have been initially identified

NEW DELHI: In a significant development, Gas Authority of India Limited (GAIL) and China Gas Holdings Limited on Tuesday signed a joint venture agreement for pursuing ventures in CNG, city gas distribution projects, pipelines and LNG in China, India and third countries.

The agreement was signed by R. K. Goel, Director (Finance), GAIL, and Liu Ming Hui, Managing Director, China Gas, in the presence of GAIL Chairman and Managing Director, U. D. Choubey.

Pursuant to the signing of the agreement, a joint venture company between GAIL and China Gas, with 50:50 equity participation, will be set up. The business of joint venture will be primarily related to natural gas sector projects in the areas of CNG, city gas, coal bed methane (CBM), pipelines and LNG in China, India and other countries also.

Speaking on the occasion, Mr. Choubey expressed satisfaction at the progress of the joint venture and said action should be speeded up on the city gas front. He also suggested that the joint venture could look into possible joint working in the area of modular LNG systems which China Gas had been pursuing.

Mr. Liu Ming Hui made a presentation on the performance of China Gas and said GAIL was one of the first overseas strategic investors in the company. The joint venture board would comprise four directors, two from each company. The chairman of the board will first be nominated by GAIL and such nomination will rotate between GAIL and China Gas every two years. Both GAIL and China Gas will have equal representation in the management of the joint venture. The management positions held by the representatives of GAIL and China Gas will also be rotated every two years. The CNG and CBM projects have been initially identified for implementation. After the due diligence study for the projects, the joint venture will be formed for implementing the projects.

PTI reports:

In May 2005, GAIL had made a strategic investment in China Gas by acquiring 210 million shares. It currently holds around seven per cent equity in China Gas. “GAIL’s expertise in midstream and downstream gas sector and China Gas’s track record in securing contracts and rapid expansion will be leveraged to make the joint venture a successful company,”

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