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GAIL inks pact with Gazprom and Stroytransgaz

New Delhi, December 3, 2004

03 December 2004, New Delhi : GAIL (India) Limited and Gazprom have entered into a Strategic Cooperation Agreement (SCA) to jointly examine various project opportunities for deliveries of natural gas to India and examining project opportunities for transnational gas pipelines. The agreement was signed by Mr. Proshanto Banerjee, Chairman and Managing Director, GAIL (India) Limited and Mr. Alexei Miller, Chairman, Gazprom in New Delhi today in the presence of Russian President Mr. Vladimir Putin and Indian Prime Minister Mr. Manmohan Singh. Another MOU for undertaking construction, ownership and operations of gas pipeline projects in different countries in the world was signed by Mr. Proshanto Banerjee, Chairman and Managing Director, GAIL and Mr. Victor Lorents, President Stroytransgaz of Russia.

The agreement with Chairman, Gazprom is the outcome of a meeting held during the visit of Hon’ble Minister, Petroleum and Natural Gas, Government of India to Moscow during 23rd to 26th October 2004. During the meeting, it was agreed to expand the scope of cooperation between GAIL and Gazprom. GAIL and Gazprom had earlier entered into a Memorandum of Understanding in October 2000, to jointly pursue business opportunities in India, Russia and other countries. Under this, Gazprom is partner of GAIL in Block 26 in Bay of Bengal awarded under NELP I.

Under the Strategic Cooperation Agreement signed between Gazprom and GAIL, the two companies shall discuss and examine the applicability of “Oil for Gas” mechanism for the projects which are agreed for joint implementation. The two companies shall explore opportunities in joint participation in the forthcoming NELP V, gas pipeline projects, underground gas storage, distribution pipeline networks, safety and security of pipelines and installations, expansion of CNG use, gas processing, gas based power generation, gas based petrochemicals production etc.

The MOU signed between GAIL and Stroytransgaz will undertake strategies to leverage its expertise in the area of gas pipelines ownership and operations. The MoU is mainly focused at jointly pursuing economical attractive gas pipelines in India, Russia and the third countries covering EPC, O & M as well as the projects implemented under BOOT and similar mechanisms. The parties would form joint ventures for ownership and operatorship of specific pipeline projects, the terms of which would be mutually agreed on case to case basis. The MoU would generate new business opportunities for the two companies in India, Russia and the third countries for undertaking pipeline projects as well as underground gas storage projects.

A Joint Coordination Committee shall be constituted to oversee the implementation of scope of work contained in the SCA with Gazprom. The two companies will share information on the Indian gas market and business opportunities as well as similar opportunities in Russia to enable development of specific projects. Scientific and technical cooperation in the above areas of business as well as training and exchange of specialists shall also be done.

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