GAIL widens its global presence; forms SPV with partners for TAPI pipeline project

GAIL CMD BC Tripathi

PUBLIC sector gas utility GAIL gets another shot in its arm when, the Maharatna PSU, along with government gas companies of Turkmenistan, Afghanistan and Pakistan has set up a company that will build, own...

and operate 1,800-kilometer of gas pipeline across Turkmenistan-Afghanistan-Pakistan-India (TAPI).

The gas utility major has already strengthened its global footprints and the recent venture will only reinforce its growing clout in international arena.

The new company has been incorporated as a Special Purpose Vehicle in the Isle of Man, a British Crown dependency and is called TAPI Pipeline Company.

It would be responsible for for finance, design, construction, operation and maintenance of the TAPI pipeline.

Turkmenistan's national gas company Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems (Private) and GAIL will own equal stake in TAPI Pipeline Company.

The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. This will enable the landlocked Turkmenistan, which has the world's fourth-largest proven gas reserves, to expand its gas export market while supplying fuel to energy starved Afghanistan, Pakistan, and India.

The pipeline is expected to carry 90 mmscmd gas, of which India and Pakistan would get 38 mmscmd each. Afghanistan's share would be ..

In a statement Asian Development Babk (ADB) issued on November 13, the transaction advisor for the TAPI gas pipeline, said that State concerns Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems (Private) Limited, and GAIL (India) Limited will own equal shares of the company.

Klaus Gerhaeusser, Director General of ADB’s Central and West Asia Department, said that this is a key step towards development of the pipeline network.

Last year, ADB was appointed the transaction advisor for the TAPI gas pipeline project. Establishment of the TAPI pipeline company is an integral part of the larger goal of identifying and selecting a commercial consortium leader to spearhead the construction and operation of the pipeline.

“When selected, the commercial consortium leader will take a substantial stake in the company,” the statement said.

The TAPI pipeline will export up to 33 billion cubic metres of natural gas annually from Turkmenistan to Afghanistan, Pakistan, and India over 30 years.

Turkmenistan has the world’s fourth-largest proven gas reserves, and the pipeline will allow the landlocked country to diversify its gas export markets to the southeast.

GAIL's global presence

As a strategy of going global and further expanding global footprint, GAIL has formed a wholly-owned subsidiary company, GAIL Global (Singapore) Pte Ltd. in Singapore for pursuing overseas business opportunities including LNG & petrochemical trading. In U.S, GAIL has 20 percent working interest with Carrizo Oil & Gas Inc. in the Eagle Ford shale acreage, Texas through a wholly owned subsidiary GAIL Global (USA) Inc. Subsequently, a wholly owned subsidiary of GAIL Global (USA) Inc. was formed in order to explore LNG import/liquefaction capacity booking opportunities from U.S.

GAIL is also an equity partner in two retail gas companies of Egypt, namely Fayum Gas Company (FGC) and National Gas Company (Natgas). Besides, GAIL is an equity partner in a retail gas company involved in city gas and CNG business in China – China Gas Holdings Limited (China Gas). Further, GAIL and China Gas have formed a joint venture company – GAIL China Gas Global Energy Holdings Limited for pursuing gas sector opportunities primarily in China.

GAIL is a part of consortium in two offshore E&P blocks in Myanmar and also holds participating interest in the joint venture company – South East Asia Gas Pipeline Company Limited incorporated for transportation of gas produced from two blocks in Myanmar to China.