GAIL eyes stake in Central European gas pipeline project

New Delhi , Aug. 20 GAIL (India) Ltd is likely to bag equity participation in the Rs 25,000-crore Nabucco natural gas pipeline project, a transnational 3,300-km pipeline from the Caspian Sea to Central Europe.

According to a company communiqué, GAIL has sent an expression of interest for participation in the project. A final decision on GAIL's equity participation in this project is expected by the end of 2005.

To implement the project, a new company Nabucco Company Pipeline Study GmbH has been set up with the major objective of financing, selling of the transportation capacity and all related activities.

The Nabucco Company, owned by Nabucco consortium partners from five participating countries — BOTAS from Turkey, Bulgargaz EAD from Bulgaria, S.N.T.G.N. Transgaz S.A. from Romania, MOL Natural Gas Transmission Company Ltd from Hungary, and OMV Gas GmbH (a 100 per cent subsidiary of OMV Aktiengesellschaft) from Austria — has agreed to evaluate the GAIL offer.

GAIL has also offered its services for carrying out operations and maintenance of the proposed pipeline, highlighting its experience and expertise in this field.

The pipeline would run from the Georgian/Turkish border and the Iranian/Turkish border, respectively, to Central Europe via Turkey, Bulgaria, Romania, Hungary and Austria, GAIL said.
The capacity of the pipeline would be 26-32 billion cubic meter per annum (BCMA)/70-90 million standard cubic meter per day (MMSCMD).

Out of the total pipeline capacity, around 50 per cent of the gas is to be supplied to Austria.
The project is likely to be completed by 2011.

The decision to nominate GAIL as the nodal agency to pursue Indian participation in the project was taken during a meeting held in New Delhi in March this year between officials of the Ministry of Petroleum and Natural Gas and GAIL with a Romanian delegation led by the Director-General, Ministry of Economy and Commerce, Romania.

Subsequently, during the visit of an Indian delegation led by Mr Mani Shankar Aiyar, Minister of Petroleum and Natural Gas, to Romania in July, GAIL had a meeting with Transgaz, Romania, regarding participation in the project.

GAIL has a memorandum of cooperation with BOTAS, Turkey, a state-owned company. Under this framework, GAIL and BOTAS are also in discussion for GAIL's participation in the Nabucco project.

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