The Hindu Business Line : GAIL to bear Rs 167-cr subsidy burden for Q2

GAIL (India) Ltd will bear a subsidy burden of Rs 167 crore for the second quarter of 2005-06 on sale of cooking gas and kerosene by oil marketing companies, the Chairman and Managing Director, Mr Proshanto Banerjee, said.

GAIL's share in the subsidy burden on sale of cooking fuel in the April-June quarter was Rs 153 crore.

"Of the Rs 320 crore we'll pay towards subsidy burden during the first half of the current financial year, about Rs 220 crore would be on account of sale of kerosene. There is perhaps little justification in the Government asking us to pay subsidy on kerosene when we're not involved in the kerosene business," he said.

On the proposed tie-ups for oil exploration and production (E&P) companies, Mr Banerjee, said GAIL plans to acquire a small or medium sized E&P company. GAIL is receiving proposal for acquiring such a company, which will help in strengthening its technical skills, he said.

He, however, refused to set any time limit or investment for the acquisition.

Regarding its foray into E&P activities, he said that the company now holds participating interests in 14 exploration blocks that vary from 10 to 80 per cent. "We expect to become a qualified operator of oil and gas fields," he said.

Mr Banerjee said GAIL is hopeful of getting its share of gas from a Myanmar offshore petroleum exploration block within three years.

GAIL and ONGC Videsh Ltd hold a combined 30 per cent stake in the A-1 exploration block in Myanmar. GAIL has also tied up with a foreign company to bid for the ongoing exploration and bidding round in Libya to acquire oil and gas assets.

GAIL (India) Ltd will restart the 2,184-MW Dabhol Power Project by September 2006, Mr Banerjee said.

"Within a year, we'll have the project up and running," he told shareholders at the company's annual general meeting in New Delhi.

As for the concerns have been expressed on the availability of natural gas to run the project, Mr Banerjee said GAIL would import liquefied natural gas (LNG).

The company is in talks with oil companies from Abu Dhabi, Oman, Malaysia, Australia and Qatar for the supply of LNG.

Mr Banerjee said, "It would be a challenge to source at a affordable and acceptable price."

He, however, said the price of LNG would not be benchmarked at $2.53 per million British thermal units, the price at which Qatar is selling LNG to India.

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