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Dr U.D. Choubey, CMD, GAIL (file photo).

Richa Mishra

New Delhi, Nov. 9 GAIL (India) Ltd plans to rope in another Indian company as partner for its likely business venture with Russian oil firm Lukoil. The possible Indian partner in the project could be private sector major Reliance Industries Ltd (RIL). The state-owned gas transmission and marketing company has been in talks with Lukoil for building a petrochemical plant and liquefied natural gas (LNG) terminal in Saudi Arabia.

During a recent meeting with the board members of Lukoil, GAIL’s Chairman and Managing Director, Mr U.D. Choubey, had envisaged interest in picking up stake in Lukoil’s onland gas rich block A in EmptyQuarter, near Ghawarin in Saudi Arabia.

Besides, acquiring stake, GAIL has also proposed to jointly set up a LNG terminal and a petrochemical plant in Saudi Arabia along with Lukoil and an Indian partner. Lukoil has 80 per cent stake in the block, while the remaining is with Saudi Aramco. Lukoil has two blocks in Saudi Arabia.

While declining to disclose the name of the Indian firm which is likely to partner GAIL, Mr Choubey told Business Line that it would be a joint venture between the three entities. GAIL already has a project with Indian Oil Corporation in Iran, and has recently inked a memorandum of understanding with Reliance Industries for possible opportunities in petrochemical business in other countries.

The proposed petrochemical plant in Saudi Arabia will be set up based on the gas from these fields. GAIL, which has been scouting for importing LNG to India, is keen to bring gas from the fields in the LNG form to the country.

This, according to industry experts, will also help GAIL to source gas for the Dabhol project, which it has to provide for from 2009. Apart from gas sourcing, which continues to be thrust area for GAIL, the company has been looking at strengthening its presence through upstream and downstream integration in petrochemical and exploration and production business.

Mr Choubey said GAIL and Lukoil have formed a joint working group for the purpose. The working group would not only be examining the prospects of the petrochemical and LNG project in Saudi Arabia but for a possible tie-up in other activities in the hydrocarbon sector. Only after an understanding is reached on the project the equity structure and investments will be decided, he added.

Besides Lukoil, GAIL is also in talks with Qatar’s state-owned Qatar Petroleum to build a petrochemical plant that country.

More Stories on : Overseas Investments | Alliances & Joint Ventures | GAIL (India) Ltd | Reliance Industries Ltd | Petroleum

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