GAIL signs MoU with Aussie explorer
Sydney, Feb 24 (UNI) The Indian gas giant GAIL has signed a Memorandum of Understanding (MoU) with an Australian energy explorer Arrow Energy Ltd to form a joint venture to explore gas in Australia and India.
The GAIL and Australian mining company joint venture would be according to the Australian Stock Exchange (ASX) and will be finalised over the coming months. The Indian energy major is poised to pump in substantial money to find gas on Australian territory, a release said here today.
GAIL is likely to invest 500 million Australian dollars in its quest to find gas down under and elsewhere.
''Through this agreement we will have an injection of funds and the use of GAIL engineers on secondment, allowing us to rapidly accelerate our Australian development projects,'' Arrow Chief Executive Nick Davies said in a statement.
''It is likely that any investment by GAIL will be made across the entire value chain including investment in both exploration and future production projects,'' he further said.
The Arrow Energy would also benefit from the partnership in another way as GAIL would help the Australians to find export opportunities to make the optimum use of the Australians' gas production through multiple projects.
''GAIL will identify export markets for gas-to-liquids or compressed natural gas, and we will be able to accelerate our sales platform beyond the current finite market of Queensland,'' Mr Davies said.
''We believe there is a wide range of opportunities for both companies in India, Australia and potentially elsewhere,'' he added.
While GAIL helps Arrow in earning export dollars, the Australian company would assist GAIL, according to the media release, in exploration and development of coal seam methane projects in India where there is a strong demand as well as high prices for gas.
''India is currently only meeting about half of its potential gas needs. Some of that is from domestic production and some is being imported as LNG from the Middle East at high cost,'' CEO of Arrow Energy said.
''This is a win-win agreement which combines GAIL's country knowledge and market position with Arrow's CBM technical and development experience.'' ''Potentially we could jointly bid for CBM exploration blocks in the upcoming round of CBM acreage releases in India, where there is also significant tax concessions for emerging CBM players,'' Mr Nick Davies added.
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