The Hindu Business Line : Better realisation from petrochem, LPG

Mr Proshanto Banerjee, CMD, GAIL, flanked by Mr S. Niyogi, Director, Human Resources, and Mr J. K. Jain, Director, Finance, at a press conference in the Capital on Wednesday.

NEW DELHI, April 2

GAIL (India) Ltd recorded a net profit of Rs 1,565 crore during the financial year 2002-03, up 32 per cent over the previous year's figure of Rs 1,186 crore. Turnover rose 11 per cent to Rs 11,763 crore.

The improved performance is on the back of better realisation on petrochemicals products as well as LPG. While the gross margin from petrochemicals has registered a 39 per cent increase, the gross margin from LPG and allied products has doubled to Rs 980 crore.

GAIL produces around a million tonnes of LPG, or 13 per cent of the country's consumption. While the price of natural gas (feedstock) is artificially kept low, it realises full-market prices for the LPG it sells to oil marketing companies. The high global LPG prices through the year have helped boost the returns from this business.

Announcing the results here on Wednesday, the GAIL Chairman and Managing Director, Mr Proshanto Banerjee, said the year has witnessed "balancing of portfolio". The core gas transmission business has witnessed a 2 per cent growth during fiscal 2002 over the previous year compared to the other three businesses of LPG transmission, petrochemicals, LPG and other allied activities, which have grown by 16 per cent each.

While 62.7 million standard cubic metres per day of gas was transmitted and marketed, 1.52 million metric tonnes of LPG was moved through its pipelines. In the petrochemicals segment, 2.9 lakh tonnes were sold through the year. The company also produced around 1.3 million tonnes of LPG and other products.

On the gas marketing front, the company has been offered an equity stake by Royal Dutch/Shell group in its two city gas distribution projects in Egypt.

"Shell has offered us 19 per cent equity in Fayum Gas Company and 10 per cent equity in Shell CNG Company (both situated in Egypt)," Mr Banerjee told newspersons here.

The Fayum gas company caters to the consumer's piped gas requirement while Shell CNG sells compressed natural gas for automobiles.

GAIL officials are expected to visit Cairo next week to conduct a due diligence of the project. "`Our expertise in creating, operating and maintaining the infrastructure is what Shell is seeking. GAIL will also assist Shell in expanding the existing infrastructure and operations and maintenance," according to Mr Banerjee.

In Turkey, the company has inked an agreement with Botas to set up the city gas distribution system. In Iran, it is aiding the setting-up of CNG infrastructure and marketing systems. It is also exploring the possibility of entering into an agreement with the National Petrochemicals Company for joint marketing and exports of petrochemicals.

In Dhaka, Bangladesh, GAIL was surveying the possibility of setting up the city gas transmission system, which may be funded by the Asian Development Bank. Discussions on a similar project are going on in Manila also.

On the exploration front, GAIL has evinced interest in picking up Cairn Energy Plc's oil and gas producing asset in India and Bangladesh.

"It (Cairn Energy) has offered us its oil and gas block in the Krishna-Godavari (K-G) Basin... we are not averse to acquisition of Cairn's other assets in India and Bangladesh," Mr Banerjee said.

GAIL officials are expected to visit Cairn Energy's data room to conduct a due diligence of its properties later this month. Cairn has stake in the Sangu block in Bangladesh.

GAIL is also keen on acquiring Gujarat State Petroleum Corporation's (GSPC) shallow water block (KG-OSN-2001/3) in the K-G basin, Mr Banerjee said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Better realisation from petrochem, LPG — GAIL net up 32 pc at Rs 1,565 cr