Press Releases
[New Delhi, 26th May, 2007] Hindi version
GAIL (India) Limited
GAIL and China Gas to form Joint Venture Company
New Delhi, June 26, 2007: GAIL (India) Limited and China Gas Holdings Limited (China Gas) today signed a Joint Venture Agreement (JVA) for pursuing gas sector business opportunities. The agreement was signed by Mr. R. K. Goel, Director (Finance), GAIL and Mr. Liu Ming Hui, Managing Director, China Gas in the presence of Dr. U. D Choubey, Chairman and Managing Director, GAIL.
Pursuant to signing of this JVA, a Joint Venture (JV) Company between GAIL and China Gas with an equity participation of 50: 50% shall be set up. The business of JV shall be primarily related to natural gas sector projects in the areas of CNG/City Gas, Coal Bed Methane (CBM), Pipelines and LNG in China, India and other countries also.
Speaking on the occasion, Dr. UD Choubey, CMD, GAIL expressed satisfaction at the progress thus far and urged that following the JV, action should be speeded up on the city gas front and also suggested that the JV could look into possible joint working in the area of modular LNG systems which China Gas had been pursuing.
Mr. Liu Ming Hui, Managing Director, China Gas made a presentation on the performance of China Gas and said, GAIL was one of the first overseas strategic investors in the company, and China Gas looks forward to greater opportunities for joint working with GAIL in India and other countries
The JV Board shall comprise of four directors, two from each company. Chairman of the Board shall first be nominated by GAIL and such nomination shall rotate between GAIL and China Gas in every two years. Both GAIL and China Gas shall have equal representation in the management of JV. The management positions held by the representatives of GAIL and China Gas shall also be rotated in every two years.
CNG and CBM project have initially been identified by the JV. After the due diligence study for the projects, the JV shall be formed for implementing the projects. Subsequently, more projects shall be identified and implemented by the JV. Project specific JVs will be formed along with local Government / Companies, wherever it is required.
GAIL and China Gas recognize the potential of adding value to their businesses by cooperative approach based on their complementary skills and strengths to jointly exploit city gas / CNG and CBM opportunities. GAIL’s expertise in the midstream and downstream gas sector and China Gas’s track record in securing contracts and rapid expansion shall be leveraged to make the JV a successful company.
It may be recalled that in May 2005, GAIL had made a strategic investment in China Gas by acquiring 210 million shares and it currently holds around 7 per cent equity interest in China Gas. GAIL also received dividend from China Gas for the year 2005-06.
China Gas is performing well and its share price has also increased by more than 2.5 times in the last two years. Recently, Finance Asia rated China Gas as the Best Managed Company in the mainland China section of 2007 Asia’s best managed companies poll.
Mr. R. K. Goel, Director (Finance), GAIL and Mr. Liu Ming Hui, Managing Director, China Gas Holdings Limited exchange documents after signing of the Joint Venture Agreement between GAIL and China Gas in the presence of Dr. U. D Choubey, Chairman and Managing Director, GAIL.