Thursday, February 23 2006 13:10 Hrs (IST) - World Time -

Beijing: India's state-owned gas company GAIL is actively exploring business potential in China and beyond through partnership with three Chinese energy giants and a joint venture (JV) expected to be established within this year in Beijing.

The Gas Authority of India Limited (GAIL) expects to sign an agreement with Beijing Gas Group Company Ltd 'within months' to set up a joint venture to meet the surging gas demand in the capital city, Director for projects, GAIL, S Prabhakar Rao, said on the sidelines of an oil and gas transport summit here.

"Moreover, GAIL is looking to build a liquified natural gas (LNG) terminal in China for gas imports through a potential partnership with Asia's biggest oil refiner Sinopec," he said.

On the upstream oil and gas exploration front, Rao said GAIL hopes to work with China's biggest offshore oil producer, China National Offshore Oil Corp (CNOOC), to develop offshore oil and gas projects in Indonesia and Australia.

However, spokesman of Sinopec, Sang Jinghua, said he was not aware of the possible deal, 'China Daily' reported.

"I don't know whether the high-level executives (of both companies) have met or not," he said.

Rao also said that, "We hope to finalise the JV agreement with Beijing Gas within this year."

GAIL wants to participate in the compressed natural gas (CNG) and piped natural gas (PNG) projects in Beijing by working with Beijing Gas, the biggest gas distributor in the capital, Rao said at the oil and gas summit.

He said the Indian gas firm has yet to determine its shares in the new JV with Beijing Gas.

GAIL last month signed three memoranda of understanding (MoUs) with three Chinese firms Sinopec, which is Asia's biggest oil refiner, CNOOC and Beijing Gas to tighten a future partnership in the gas market.

GAIL is sourcing opportunities in terms of city gas distribution, oil and gas exploration, and production as well as LNG supply and facility building, both inside and outside China, Rao said.

For the possible LNG project, Rao said there was not a concrete project under discussion yet, but their 'most potential partner' would be Sinopec, the report said.

"We are exploring the possibility and once there is something, we would like to examine and to take part (in the LNG project)," he said.

Two LNG terminals are now under construction in Guangdong and Fujian provinces of South China, which belong to CNOOC. Eight others are also being planned along the eastern coast, among which Sinopec and its domestic rival PetroChina each own three.