In discussion with Interoil Corp for a stake in the Canadian firm's proposed LNG project

GAIL (India) on Monday said that it had entered into talks with Engineers India Ltd (EIL) to set up a joint venture to sell CNG to automobiles and piped natural gas (PNG) to households in cities.

“EIL has a long association with GAIL. We are interested in having them as partners even in city gas distribution (CGD) projects,” GAIL Chairman and Managing Director B. C. Tripathi told reporters here during an interaction at the PHD Chamber of Commerce and Industry.

Joint bidding

The two firms are now discussing bidding jointly for CGD projects in cities that would be put on offer by the sector regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), in future.

“EIL could take equity stake in CGD projects bid by GAIL in future. Also, they could give us consultancy for CGD projects,” he added.

Mr. Tripathi said GAIL was talking to Interoil Corp for a possible stake in the Canadian oil firm's proposed liquefied natural gas project in Papua New Guinea. “We are still talking to them. Nothing has been concluded as yet,” Mr. Tripathi said.

Pricing issues

About reports that GAIL's talks with Interoil had run into trouble over pricing issues, he said: “Talks are still on. They are at a preliminary stage. I cannot say what stake GAIL can get. We are still talking to them on all these issues.”

Resource payment

The Canadian company is believed to have asked GAIL for a resource payment of $5.03 million apart from equity contributions as strategic investor.

Financing

China National Offshore Oil Corp, China's biggest offshore petroleum explorer, is already working with Interoil and the Papua New Guinea-owned Petromin PNG Holdings on commercial terms for financing the government's stake in the project. It is, however, not clear if China National Offshore Oil Corp, the Beijing-based parent of the Hong Kong-listed Cnooc, would take a stake in the project.

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