GAIL ( India ) Ltd.

Gail Success Story

Formation of GAIL

GAIL (India) Ltd was incorporated in August 1984 as a Central Public Sector Undertaking (PSU) under the Ministry of Petroleum & Natural Gas (MoP&NG). The company was initially given the responsibility of construction, operation & maintenance of the Hazira - Vijaypur – Jagdishpur (HVJ) pipeline Project. It was one of the largest cross-country natural gas pipeline projects in the world. Originally this 1800 Km long pipeline was built at a cost of Rs 1700 Crores and it laid the foundation for development of market for natural Gas in India.

Current Businesses - Domestic

GAIL, after having started as a natural gas transmission company during the late eighties, has grown organically by building large network of Natural Gas Pipelines covering over 8500 Km with a capacity of around 160 MMSCMD; two LPG Pipelines covering around 1900 Km with a capacity of 3.8 MMTPA of LPG; seven gas processing plants for production of LPG and other Liquid Hydrocarbons, with a production capacity of 1.4 MMTPA; and a gas based integrated Petrochemical plant of 410,000 TPA polymer capacity which is further being expanded to a capacity of 900,000 TPA. The Company also has 70% equity share in Brahmaputra Cracker and Polymer Limited (BCPL) which is setting up a 280,000 TPA polymer plant in Assam. Further, GAIL is a co-promoter with 17% equity stake in ONGC Petro-additions Limited (OPaL) which is implementing a green field petrochemical complex of 1.1 MMTPA Ethylene capacity at Dahej in the State of Gujarat.

Keeping in mind the requirement of growth and consolidation as well as opportunities arising out of New Exploration Licensing Policy (NELP) of Government of India, the company has integrated upstream into the business of Exploration & Production and currently has stakes in 27 E&P blocks including 2 blocks overseas (in Myanmar) and 1 CBM block. The company is a pioneer in City Gas Distribution (CGD) business in India, with Indraprastha Gas Limited (IGL) in Delhi and Mahanagar Gas Limited (MGL) in Mumbai being its biggest success stories. Besides IGL and MGL, GAIL has set up several JVs for CGD to supply gas to households, transport sector & commercial consumers in various cities. In 2008, GAIL incorporated a wholly owned subsidiary, GAIL Gas Ltd. to exclusively focus on city gas distribution business.

Leveraging on its pipeline network, GAIL has built a strong Optic Fibre Cable (OFC) network of 13,000 km approximately for its own internal use and leasing of bandwidth as a carriers' carrier.

As a part of its initiative towards reducing carbon footprint and creating a path of sustainable growth, GAIL is building a portfolio of renewable businesses. The company has successfully commissioned a wind energy power project of 4.5 MW capacity in Kutch district of Gujarat. The Company is now executing another 15 MW wind energy power project in Gujarat and 100 MW Commercial Wind Energy Generation Project in the states of Tamil Nadu and/or Karnataka.

Global Presence

As a strategy of going global and further expanding global footprint, GAIL formed a wholly-owned subsidiary company, GAIL Global (Singapore) Pte Ltd. in Singapore in 2004 for pursuing overseas business opportunities. GAIL is also an equity partner in three retail gas companies in Egypt, namely Fayum Gas Company (FGC), Shell CNG Egypt (SCNGE) and National Gas Company (Natgas). FGC and Natgas are city gas distribution companies involved in supply of gas to residential, commercial and small industrial customers, whereas SCNGE is involved in setting up of Compressed Natural Gas (CNG) stations and supply of CNG to transport sector. In 2011, GAIL has acquired a 20% stake in Houston-based Carrizo Oil and Gas’s Eagle Ford shale acreage in a move aimed at acquiring expertise in shale gas. A wholly owned subsidiary GAIL Global (USA) Inc. was formed in Houston to expand GAIL’s business portfolio in the North American market by pursuing various upstream and midstream opportunities including LNG export to India.

GAIL is also an equity partner in a retail gas company involved in city gas and CNG business in China – China Gas Holdings Limited (China Gas). Further, GAIL and China Gas have formed an equally owned joint venture company - GAIL China Gas Global Energy Holdings Limited for pursuing gas sector opportunities primarily in China.

GAIL is a part of consortium in two offshore E&P blocks in Myanmar and also holds participating interest the joint venture company – South East Asia Gas Pipeline Company Limited incorporated for transportation of gas to be produced from two blocks in Myanmar to China.

In addition to having two wholly owned subsidiary namely GAIL Global (Singapore) Pte Ltd & GAIL Global (USA) Inc. for managing investments abroad, GAIL has opened a representative office in Cairo, Egypt to pursue business opportunities in Africa and Middle East.

Consistent track record

GAIL has been a leading public enterprise with a consistently excellent financial track record. The Turnover and PAT have shown remarkable accomplishment with CAGR of 13% and 14% respectively in last decade. GAIL also has the highest EBITA per employee in the oil & gas industry.

GAIL has recently developed corporate growth strategy for the period 2011-20 and the same has been approved by the Board of Directors. GAIL aspires to become an integrated hydrocarbon major with significant upstream and downstream interests by 2020.