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Indian Gas Firm Seeks to Buy Equity in Chinese Firms for CNG Supply

Posted on: Tuesday, 23 August 2005, 09:01 CDT

Indian gas firm seeks to buy equity in Chinese firms for CNG supply

NEW DELHI, Aug. 22 (Xinhua) -- India's gas major GAIL (India) Ltd is seeking to buy equity in two Chinese firms to promote the use of green fuel compressed natural gas (CNG) in the Chinese capital ahead of the 2008 Olympics.

GAIL plans to acquire stakes in Beijing Gas Company and Beijing Jianggang Gas to help Beijing and six suburban districts to switch over to CNG.

"GAIL is pursuing equity participation in Beijing Gas Company and Beijing Jianggang Gas for the implementation of CNG projects in Beijing city," GAIL said in a statement Monday.

"Considering the merits of natural gas as a clean fuel, China is adopting policies which encourage use of natural gas in place of town (coal) gas in cities as well as CNG in the transport sector," it said.

In February, the Indian gas infrastructure major acquired 210 million shares of the China Gas Holdings Ltd, which has a 49 percent stake in Beijing Jianggang Gas. The majority stake in the firm is held by Beijing Gas Company.

China has decided to introduce CNG in Beijing to convert all transport vehicles to operate with the green fuel before the Olympics.

During a visit to China earlier this month, GAIL Chairman Proshanto Banerjee held discussions with China Gas Holdings on participating in CNG projects of Beijing municipality area and in six suburban districts.

"GAIL has also been offered three cities in China - Wuhu city in Anhui province and Huainan and Yichang cities in Hubei province- for CNG projects. The projects will be executed by joint ventures between GAIL and China Gas Holding Limited," the statement said. Issues related with the formation of joint ventures have been discussed and the "agreement is under finalization," it said.

Source: Xinhua News Agency - CEIS

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