Press Releases

[New Delhi, February 15, 2005]

GAIL Signs Agreement with China Gas Holding Limited

(Sl. No. ND/CC/05/13)

GAIL (India) Limited today signed a Heads of Agreement (HoA) with China Gas Holding Limited to take up to 10% equity stake in China Gas. Mr. Proshanto Banerjee, Chairman and Managing Director, GAIL and Mr. Liu Ming Huin, Managing Director, China Gas signed the HoA during the 3rd Asia Gas Buyers’ Summit. As part of the MoU, GAIL will subscribe to new shares amounting to 10% of the enlarged total issued share capital of the Chinese Company. There will be a two-year lock-in period for the investment.

The two companies would cooperate in the operation and management of city gas pipeline networks including the sale and distribution of natural gas through these networks; construction, management and / or operation of long distance natural gas and / or other energy fuel pipeline and the sale and distribution of liquid petroleum gas, liquid natural gas, compressed natural gas and / or other energy fuels. GAIL will also facilitate training programmes for the employees of the Chinese company in all aspects of the gas business where GAIL has the requisite experience.

About China Gas

China Gas is a retail natural gas distribution company in China and is listed on the Hong Kong Stock Exchange with current market capitalization of over US $ 300 million. The company is mainly focusing on gas supplies to residential, commercial and industrial users in China. China Gas has established a number of Joint Ventures (JVs) for retail gas distribution in various provinces / cities and currently has operations covering major cities such as Beijing, Wuhu, Yichang and Huainan. China Gas has forty-two concessions in China, of which twenty-four are already operational. GAIL will give its expertise on CNG in all the cities where China Gas is in operation.