State-owned gas utility GAIL India Ltd today said it has secured a $100 million (Rs 514 crore) loan from Bank of Tokyo-Mitsubishi UFJ to part-finance its pipeline expansion plans.
"The loan agreement was signed between GAIL India Director (Finance) P K Jain and Bank of Tokyo General Manager Naoki Isetani here yesterday," the company said in a press statement.
The term of the loan is five years.
"This term loan agreement comes close on the heels of an earlier term loan of $150 million taken by GAIL from Bank of Tokyo in June, 2011," it said.
The loan agreement signed now is the first in the series of three tie-ups that GAIL plans to enter into for a total of $300 million in external commercial borrowings (ECB).
The debt would help GAIL fund ongoing expansion plans and new projects of around $9 billion.
GAIL is presently implementing projects to lay 5,500 km of pipelines at an estimated cost of Rs 25,000 crore ($5 billion). When completed, the capacity of GAIL's pipelines would increase to over 300 million standard cubic metres per day from 175 mmscmd at present.
The company is also doubling the capacity of its petrochemicals plant at Pata, in Uttar Pradesh, from 446,000 tonne per annum at present to 900,000 tonne per annum by 2014.
GAIL, the nation's largest gas transmission and marketing company, had a debt-equity ratio of 0.17 and Debt Service Coverage Ratio (DSCR) of 9:1 as of September 30, 2011.
It currently has a natural gas pipeline network spanning 8,700 km and accounts for 3/4th of gas transmission capacity in the country.
The statement said GAIL recently acquired its first shale gas asset in the USA. Its wholly owned US subsidiary, GAIL Global (USA), has taken 20% interest in Houston-based Carrizo Oil & Gas Inc's Eagle Ford Shale acreage.
GAIL has also set up a wholly-owned subsidiary company, GAIL Global (Singapore) Pte Ltd, in Singapore for sourcing and trading of liquefied natural gas.