(EnergyAsia, Feb 25) — Indian gas company GAIL will acquire up to 10% of China Gas Holdings Ltd. The transaction advisors to GAIL were HSBC, KPMG and Dua Associates.


Proshanto Banerjee, GAIL’s chairman and managing director, and Liu Ming Hui, China Gas’s managing director, recently signed the share subscription agreement under which GAIL will subscribe to 210 million new shares of China Gas Holdings Ltd.


The two companies have also agreed to establish a strategic co-operative partnership and will form a joint venture to invest in projects in China, India and third countries subject to viability and attractiveness. The JV will work for the operation and management of city gas pipeline networks including the purchase, sale and distribution of natural gas through these networks.


The JV will also be involved in the construction, management, operation of long distance natural gas and other energy fuel pipelines. It will also purchase, import, produce, sell and distribute LPG, LNG, CNG and other energy fuels.


GAIL and China Gas will hold an equal interest in the joint venture. The JV will invest directly or indirectly in projects after completion of undertaking due diligence studies.


GAIL said it will provide senior management with project planning, execution, operation and technical expertise for the projects.


Hong Kong-listed China Gas is a retail natural gas distribution company in China with a market capitalisation of over US$ 300 million. The company is mainly focusing on supplying gas to residential, commercial and industrial users in China.


China Gas has established a number of joint ventures for retail gas distribution in various provinces and cities. Its operations cover major cities such as Beijing, Wuhu, Yichang and Huainan. China Gas has forty-two concessions in China, of which twenty-four are already operational.