By IANS
New Delhi : State-run gas exploration major GAIL (India) Ltd and China Gas will form a 50:50 strategic joint venture that will operate not just in their respective countries but also in other markets across the globe.
"The joint venture has initially identified compressed natural gas and coal bed methane projects," the two companies said in a statement Friday, after the pact for the joint venture was signed here.
"The business of the joint venture shall be primarily related to natural gas projects in the areas of compressed natural gas, city gas, coal bed methane, pipelines and liquefied natural gas in China, India and other countries."
According to Liu Ming Hui, managing director of China Gas, GAIL was one of the first companies with which his company had formed a strategic venture and added he looked forward to the success of the Sino-Indian joint venture.
GAIL had made a strategic investment in China Gas in May 2005 by acquiring 210 million shares and it currently holds around 7 percent equity interest in the company. GAIL also received dividend from China Gas for the year 2005-06.
"After the joint venture is formed, action should be speeded up on the city gas front," said U.D. Choubey, chairman and managing director of GAIL. "It should also look at modular liquefied gas systems which China Gas had been pursuing."
The two sides would have equal representation in the management of the venture and key positions held by their representatives will be rotated every two years, the statement issued by the two companies said.
"GAIL and China Gas recognize the potential of adding value to their businesses by cooperative approach based on complementary skills and strengths to jointly exploit city gas compressed natural gas and coal bed methane opportunities."