GAIL targets Rs. 50,000 crore revenue by 2011
Pays 100% dividend for the year 2006-07
New Delhi, September 3, 2007: GAIL (India) Limited has drawn up a growth strategy which shall steer it to revenues of Rs 50,000 Crore plus by 2011 from a revenue of Rs 16,047 Crore in the year 2006-07. This vision was shared by GAIL’s Chairman and Managing Director, Dr. U. D. Choubey while addressing the Company’s shareholders at the 23rd Annual General Meeting of the Company in New Delhi today.
Describing the salient features of this multi- pronged strategy, Dr. Choubey said that the Company will focus on protecting and strengthening the core competencies of gas transmission, distribution and marketing businesses and shall pursue margin enhancing businesses namely, petrochemicals and city gas projects.
The Company intends to use first mover advantage to strategic benefit in Gas Retailing and evolve a partnership based business model with gas producers, he said. Similarly, the Company shall diversify downstream presence in gas based LPG and Petrochemicals plants. He added that GAIL will aggressively pursue gas sourcing options both from the new domestic sources as well as through international sources by way of pipelines and LNG route, to secure gas supplies for transmission and trading businesses.
The Company shall also endeavour to secure own sources of gas through participation on the E&P front and intends to participate aggressively in the upcoming E&P opportunities including NELP VII. Further, GAIL will be selectively pursuing global diversification opportunities in the areas having synergy with existing business.
Dr. Choubey said, “Towards implementing the above strategy, GAIL is focusing on leveraging the potential of its Human Resources through specific measures to train, motivate and channelize them towards the organizational goals. GAIL believes in and is actively pursuing the philosophy of cooperation and collaboration in the energy sector. Accordingly, GAIL has taken numerous steps to forge new relationships, cement existing ones and collaborate within the hydrocarbon industry and beyond, with the private as well as public sector”.
Transmission Infrastructure
GAIL, he said, is moving ahead in a time bound manner to complete the 8 new gas pipelines in two phases, targeting 100% completion by 2011. These will form part of an integrated gas grid in the country, spread over more than 5,000 Kms at an estimated capital expenditure of Rs. 20,000 Crore. It would increase GAIL’s Natural Gas Transmission capacity to around 300 MMSCMD and almost double GAIL’s existing trunk pipeline network to nearly 12,000 Km.
Gas Sourcing
For ensuring gas availability beyond the present quantities, GAIL has entered into partnerships with the Oil and Gas fraternity and outside by signing MoUs/Contracts in critical business areas with IOCL, ONGC, HPCL, BPCL, RIL, Shell, Indian Institute of Petroleum and a host of other organizations. GAIL is also in active discussions with international suppliers for gas sourcing in addition to tying up domestic supply sources.
Gas Retailing
The next decade belongs to city gas distribution. GAIL was the first company to introduce City Gas Projects in India for supply of PNG and CNG by forming Joint Venture Companies and has formed eight Joint Venture companies for city gas projects in various parts of the country. GAIL has recently approached the Government with firm plans for granting approval to pursue city gas projects in 230 cities across the country.
Global Presence
On the global front, GAIL has initiated a series of dialogues for expansion in various countries in the areas of Transnational trunk pipelines, City Gas Distribution projects, gas based Petrochemicals in gas rich countries and LPG processing plants. GAIL is making active efforts towards establishing one gas based petrochemical plants outside India.
Petrochemicals
In the area of Petrochemicals also, GAIL proposes to add significant capacities through new plants in partnership with public / private sector, both in India and abroad. One of these, the Brahmaputra Cracker and Polymer Limited in Assam, has been formed as a subsidiary of GAIL with 70% equity stake. GAIL is also expanding the capacity of the Pata Petrochemical plant to 410,000 TPA from the present 310,000 TPA.
GAIL’s Performance
The Financial Year 2006-2007 has been another successful year for GAIL. The turnover of GAIL during the year 2006-07 has gone up to Rs.16,047 Crore in 2006-07 as against Rs.14,459 Crore in 2005-06 registering a growth of 11%. The increase in turnover was achieved despite severe floods disrupting gas supply for one month and higher burden of LPG subsidy during the year. Profit After Tax for the year 2006-07 was Rs.2,387 Crore as against Rs 2,310 Crore in the previous year.
The financial strength of the Company continues to be robust with Debt–Equity ratio of 0.12 and the Earning per share (EPS) of Rs 28 as compared to Rs 27 in the previous year. The Return on Capital Employed is very healthy at 28% during the year 2006-07.
GAIL has declared a dividend of 100 percent during FY 2006-07
GAIL has recorded sustained performance in all key physical as well as financial parameters in the Financial Year 2006-07. Natural Gas continues to constitute the core business of GAIL. During the year 2006-07, Gas Sales have increased marginally to 68.35 MMSCMD from 67.63 MMSCMD in the previous year. In 2006-07, total Liquid Hydrocarbon production including LPG was over 1.343 million metric tones as compared to previous year’s production of 1.325 million MT.
In the petrochemicals sector, during 2006-2007, the production of polymer has increased by 14% registering 3.54 lakh MT as against 3.11 lakh MT in the previous year. The polymer sales increased by 11% in the year under review.
During the year 2006-07, GAIL constructed and commissioned over 1150 Kms of Natural Gas pipeline.