GAIL (India) firms up on forming SPV for TAPI pipeline project

GAIL (India) rose 2.62% to Rs 489.65 at 11:38 IST on BSE after the company said it incorporated a special purpose vehicle to build, own and operate 1,800 kilometre pipeline from Turkmenistan to India.

The announcement was made after market hours on Thursday, 13 November 2014.

Meanwhile, the BSE Sensex was up 66.25 points, or 0.24%, to 28,006.89.

On BSE, so far 61,000 shares were traded in the counter, compared with an average volume of 1.13 lakh shares in the past one quarter.

The stock hit a high of Rs 491 and a low of Rs 472.40 so far during the day. The stock hit a record high of Rs 551.35 on 31 October 2014. The stock hit a 52-week low of Rs 310 on 18 November 2013.

The stock had outperformed the market over the past one month till 13 November 2014, rising 7.47% compared with 5.90% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 16.25% as against Sensex's 7.80% rise.

The large-cap company has an equity capital of Rs 1268.48 crore. Face value per share is Rs 10.

GAIL (India), along with state gas companies of Turkmenistan, Afghanistan and Pakistan, have established a company that will build, own and operate the planned 1,800-kilometer Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline, the company said in a statement.

State Concern "Turkmengas", Afghan Gas Enterprise, Inter State Gas Systems and GAIL will own equal shares of the company, TAPI Pipeline Company (TPCL), the company said.

The company has been incorporated as a special purpose vehicle (SPV) in the Isle of Man, a British Crown dependency, located in the Irish Sea. This SPV would be responsible for finance, design, construction, operation and maintenance of the TAPI pipeline, the company added.

ADB was appointed the transaction advisor for the TAPI gas pipeline project in November 2013. In that role, ADB advised on the establishment of the TAPI pipeline company as an integral part of the larger goal of identifying and selecting a consortium leader to spearhead the construction and operation of the pipeline. When selected, the consortium leader will be expected to take a substantial stake in the company, GAIL (India) said.

The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. Turkmenistan has the world's fourth-largest proven gas reserves, and the pipeline will allow the landlocked country to diversify its gas export markets to the southeast. Turkmen gas in turn will provide a key new source of fuel for Afghanistan, Pakistan, and India, the company added.

India is pursuing the Turkmenistan - Afghanistan - Pakistan - India (TAPI) Pipeline project to receive natural gas supply from the Yolotan Osman (Galkynysh) fields in Turkmenistan. The 1800 kms of pipeline will carry 90 MMSCMD (million metric standard cubic meter per day) of natural gas, of which India and Pakistan will receive 38 MMSCMD each and Afghanistan's share is 14 MMSCMD. Currently, Afghanistan has indicated that it will be taking volumes of the tune of '1.5 - 4 MMSCMD. Volumes not taken by Afghanistan can be equally shared between India and Pakistan. The landfall point of the pipeline in India will be at Fazilka (Punjab), the company said.

GAIL (India)'s net profit surged 42.28% to Rs 1302.90 crore on 1.36% growth in total income to Rs 14418.53 crore in Q2 September 2014 over Q2 September 2013.

GAIL (India) is India's flagship gas transmission and marketing company with global footprints. The Government of India (GoI) holds 56.11% stake in GAIL (India) (as per the shareholding pattern as on 30 September 2014).

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