GAIL: "Don't leave us out in the cold!"

Vol 5, PW 13 (15 Aug 01) Midstream & Downstream

That's the substance of a plea by GAIL chairman J.

K Jain in a letter to oil secretary Vijayendra Kaul on 31st July. Jain's distress signal is a fall-out of a meeting two weeks ago between himself, Indian Oil chairman M.

A Pathan and oil minister Ram Naik, where Indian Oil lobbied for permission to sign a "Confidentiality Agreement" with Unocal as a "first choice" distributor of Bangladeshi gas (See: PETROWATCH Vol 5/12). "We would earnestly reiterate our request to nominate GAIL as the nodal agency to deal with possible gas imports from east of India," writes Jain, evidently rattled by the prospect of seeing Indian Oil walk away with Bangladeshi gas.

Taking a dig at IOC, Jain reminds Kaul: "GAIL fully understands the critical contractual and commercial (including security) aspects of gas import projects through its involvement with earlier initiatives with Oman and Iran." On a more plaintive note, he complains that the introduction of a free gas-marketing regime has "eroded" GAIL's market, but that this "does not apply to ONGC and IOC." He adds: "Intensification in exploration following NELP-I and NELP-II as well as overseas ventures would provide growth to ONGC, whereas the growing domestic market for petroleum products would generate ample business opportunities for IOC. GAIL has dependency of gas supply on other companies, and therefore to ensure its future growth, it is necessary for GAIL to organise gas supplies."