Annual Report - 2005-06 - GAIL (India)

LPG TRANSMISSION
Your Company is exploring the possibility
to use the LPG pipelines as multi-product
pipeline for better capacity utilization.
GAILTEL
Your Company has joined hands and signed
a MOU with Power Grid Corporation and
Rail Tel for co-operation in telecom sector.
Your Company is also in the process of
acquiring National Long Distance (NLD)
license, which would throw open the
lucrative corporate and government
segment. This shall mean a significant
increase in the size of the addressable
market.
Your Company has installed a countrywide
GAILTEL Network Management Center,
(NMC) which is a state-of-the-art telecom
network management facility, enabling
centralized monitoring and control of
the entire GAILTEL network. This network
management centre is designed for 24x7
operations with world class facilities to
ensure reliability, safety and security of the
operational systems. The NMC houses highend
NMS servers, which allows centralized
control over the entire telecom assets in
the areas of real time fault management,
remote configuration management,
network performance management and
asset security management.
With this infrastructure, GAILTEL has adopted
the best practices of the industry to manage its
operations. More importantly, the NMC has enabled
GAILTEL to scale up its operations in future without
proportionate increase in costs.
E&P
Your Company has “farmed-in” in the Myanmar
A-3 Block with a 10% participating interest, while
continuing with the exploration activities in the A-1
block in Myanmar. Your Directors are glad to share
with you the success of your Company in the NELP-
V round of bidding wherein three Blocks in Gujarat,
Assam and Andaman offshore were awarded
through partnerships with reputed consortium
partners. Your Directors are also happy to share with
you that an E&P block has been awarded to GAIL in
Oman recently.
COAL BED METHANE
Coal Bed Methane is a relatively new source of gas
and its exploitation started about two decades
back in USA. Unlike conventional oil and gas fields,
coal seams act as both source and reservoir for coal
bed methane. So far commercial CBM production
is reported from 3 countries; USA, Australia and
China. The major producer of CBM is USA where
it contributes about 10% of the total natural gas
production of USA.
Government of India has already awarded 16 CBM
blocks under two rounds of bidding including two
blocks on nomination basis. Major Indian CBM
players are ONGC, RIL, Essar Oil Ltd. and GEECL.
GAIL has done various studies in
the past for pursuing business
opportunities in the CBM sector.
Services of Mineral Exploration
Corporation Limited and one reputed
U. S. consultancy company were
engaged for a broad CBM resource
assessment study, covering several coal
fields of India. DGH and GAIL organized
the first CBM conference in India in
collaboration with US Department
of Energy. GAIL some how did not
participate in CBM-I Bidding Round.
GAIL participated in CBM-II bidding
round in two blocks in consortium with
Coal India Ltd. (CIL) but unfortunately
the consortium failed to win any block.
Presently Government of India has
offered 10 CBM blocks under CBM-III
bidding round in different coalfields
in India. GAIL intends to participate in
the bidding round in consortium with
technically and financially competent
companies.
PIPELINE PROJECTS
PROJECTS COMMISSIONED
During the year, your Company
commissioned the Narimanam
– Kuthalam Pipeline Project in the
Cauvery basin region, the pipelines
connecting GVK – Vemagiri & KCJP
– GVK Loop line, Konaseama and
Gautami Power Plant in the Krishna
Godavari basin and spur lines to
consumers in the National Capital
Region in its endeavor to supply gas to
the customers.
PROJECTS UNDER EXECUTION
Your Company is currently executing
the following major pipeline projects:
Dahej - Uran Pipeline Project : This
is a part of the proposed Inter-State
Gas Grid. This pipeline will extend the
availability of gas to consumers in the
states of Gujarat & Maharashtra.
Thulendi – Phulpur Pipeline Project :
To supply gas to IFFCO.
Jagoti-Dewas-Pithampur Pipeline : To
supply R-LNG to Consumers in Ujjain,
Indore, Dewas, Dhar & Pithampur.
Kelaras-Malanpur Pipeline : To supply
R-LNG to Consumers in Malanpur
region.
DUPL – II (Pipeline from Dabhol
to Panvel) : To connect Dabhol LNG
Terminal to DUPL.
SUBSIDIARIES & JOINT VENTURES
SUBSIDIARIES
As reported earlier, your Company has already
formed a wholly owned overseas subsidiary
Company, namely, GAIL Global (Singapore) Pte.
Limited. A profit of Rs.2.16 Crores has been made
by this Company during the year under review.
Your Company is looking for more business
opportunities from this subsidiary.
JOINT VENTURES
DOMESTIC
Your Company has a participating
interest in various domestic joint venture
companies. The highlights of your
Company’s participation in these domestic
joint venture companies are as under:
PETRONET LNG LIMITED (PLL):
PLL is a joint venture
Company between GAIL,
BPCL, IOCL, ONGCL, Gaz
De France and ADB. Your
Company holds 12.5%
equity at an investment
of Rs.98.75 Crores. PLL
was formed for setting up
of LNG import and regasification facilities.
PLL has a long term LNG supply contract
with Ras Gas, Qatar for import of 7.5
MMTPA. PLL recently has signed shipping
contract for adding 3rd LNG tanker for
Dahej terminal which is being expanded
to 10 MMTPA. Presently terminal is under
operation to its full capacity of 5 MMTPA.
PLL is listed at the National Stock Exchange
of India Limited and the Bombay Stock
Exchange Limited. The share price of PLL on
the National Stock Exchange was Rs.54.90
as on 31st March, 2006.
18 Winning Momentum 19