<div>It has been talked about for quite some time now. But it needed direction from the top. In his first Budget, finance minister Arun Jaitley did just that. He proposed to add 15,000 km of gas pipelines to form a national gas grid. That comes as a shot in the arm for India’s newest Maharatna, GAIL. It currently has a 10,900-km pipeline network and is working on adding another 5,000 km. <br /><br />“We are striving to expand India’s gas grid substantially in the coming years with the construction of the Jagdishpur-Haldia, Surat-Paradip and Kochi-Mangalore-Bangalore pipelines,” says B.C. Tripathi, chairman and managing director, GAIL.<br /><br />In recent times, GAIL India (in which the government of India has a 56.11 per cent stake) has been in the news for all the wrong reasons. The fallout over the recent gas leak being just the latest setback. <br /><br />Yet, India’s leading gas transporter has notched up a four-year net sales growth of 23.1 per cent. This is on the back of GAIL adding over 4,000 km of pipeline in the past three years and reviving the 5-million-tonne-per-annum (mtpa) Dabhol LNG terminal.<br /><br />During FY2014, over 76 per cent of GAIL’s revenues of Rs 57,245 came from gas trading. Fertiliser companies accounted for 32 per cent of the gas supplied by GAIL, followed by power (31 per cent) and city gas (11 per cent).<br /><br />One of the key issues for GAIL has been gas pricing. Says Tripathi: “We believe an upward revision of gas prices will have a positive impact on our topline, though the bottom line may be hit slightly because of exposure to liquid hydrocarbons and petrochemicals. However, the actual impact can be assessed only after a change in the pricing policy.” Tripathi was given a five-year extension as head of the state-owned utility in October 2013. <br /><br />Over the past few years, GAIL has considerably expanded its global footprint. It formed GAIL Global (Singapore) for tapping overseas business opportunities. It also established a wholly owned subsidiary, GAIL Global (USA) in Texas, which acquired a 20 per cent working interest in a joint venture with Carrizo Oil & Gas in the Eagle Ford shale gas acreage in Texas. <br /><br />Through aggressive sourcing agreements, GAIL has created a long-term import portfolio of 23.8 mtpa of re-gasified liquefied natural gas from diverse sources such as the US, Russia, the Middle East and Australia. Of this, 5.8 mtpa has been secured from the US, at prices based on the attractive Henry Hub index; this will ensure the Indian market receives relatively cheap natural gas from 2017. GAIL also expanded its exploration and production portfolio by starting production from two blocks in Myanmar.<br /><br />Within the country, it is looking to expand its city gas distribution business to 50 cities.<br /><br />(This story was published in BW | Businessworld Issue Dated 11-08-2014)</div>
