It gives me immense pleasure to present to you the Annual Report and
Accounts of your Company for the year ended 31st March 2013 - its first
after attaining the status of a Maharatna. Your Company is the Youngest
Public Sector Enterprise to attain this coveted recognition. This
status provides greater operational flexibility and higher empowerment
to undertake mergers & acquisitions, and investments in joint ventures,
subsidiaries etc. It will enable your Company to expand its global
footprint and work towards enhancing India''s energy security.
Your Company performed commendably against the backdrop of a
challenging global economic and business scenario. Economic growth in
India also slowed down during 2012-13 while the Government is pursuing
policy measures to put the economy back on growth path. In this
context, it is pertinent to mention that energy plays a key role not
only in driving India''s economic growth but also social progress.
However, India is an energy deficit country with a large majority of
people not having access to clean and modern sources of energy. This
places a big responsibility on your Company to not only secure adequate
and clean energy resources but also to make them available at
affordable prices to people and industries.
Your Company is taking several steps to ensure the supply of the
cleanest fossil fuel - natural gas -across the length and breadth of
India through building necessary physical and soft infrastructure.
Natural Gas currently comprises around 10% of India''s energy basket
which may reach 15% by 2020. The current emphasis on natural gas will
rise further in India''s journey towards a low-carbon economy.
During the year 2012-13, your Company registered an 18% increase in Net
Revenue to Rs.47,333 Crore, which is also the highest ever in its
history. Despite sharing subsidies on price-sensitive petroleum
products to the tune of Rs. 2,687 Crore, the Profit after Tax increased
by 10% to Rs. 4,022 Crore during the year.
To secure natural gas supply, your Company executed a long-term LNG
supply agreement for 2.5 MMTPA with Gazprom Marketing and Trading Ltd.,
Singapore. It also entered into a long-term liquefaction tolling
capacity agreement for 2.3 MMTPA of LNG with Dominion Resources Inc. of
the US. Your Company contracted Mid-term LNG supply agreements with Gas
Natural Fenosa, Spain and GDF, France besides importing spot cargoes to
meet short term demand.
Your Company has commissioned 5 MMTPA LNG Terminal at Dabhol,
Maharashtra as Owner''s Engineer and will be the Commercial Operator of
the terminal for 25 years. This Terminal will act as the gateway to
meet the gas demand of consumers in Maharashtra, Goa and Karnataka
through imported gas. To meet the ever increasing demand along its
existing pipeline network, your Company also reserved 2.5 MMTPA
capacity in the planned expansion of LNG terminal at Dahej in Gujarat.
By adding 1,300 km of new gas pipelines to its network during 2012-13,
your Company increased its pipeline network to 10,700 km with a
capacity of 210 MMSCMD of gas transmission. With commissioning of two
new pipeline projects, namely Dabhol- Bengaluru (Phase-I) and
Kochi-Koottanad-Mangalore/Bengaluru (Phase-I) projects, your Company
has entered newer markets in the southern states of Karnataka, Goa and
Kerala. We plan to expand your Company''s network to around 15,000 Kms
within the next few years.
To further strengthen its foothold in the petrochemicals sector, your
Company is doubling the capacity of its existing petrochemical plant at
Pata, Uttar Pradesh. Thus, your Company is committed to deliver value
across the entire gas chain.
Going ahead, your Company will continue its thrust on global sourcing
and will acquire gas through transnational pipelines besides using
traditional sources. It is also planning to venture in LNG Shipping
through a joint venture model to bring home the LNG contracted
internationally. To develop domestic gas market, your Company will
continue pipeline network expansion and develop or book new
re-gasification capacity. It will also continue to expand its
petrochemicals portfolio. Your Company''s MoU with EDF Trading of the US
for cooperation in upstream opportunities in North America and in LNG
projects etc. will pave the way for its international trading
operations. In the downstream sector, your Company will expand the City
Gas Distribution network across new cities through Joint Ventures and
Subsidiaries. The long-term objective is to strengthen India''s energy
security and play a pivotal role in the country''s socio- economic
Your Company focusses strongly on acquiring the best talent and
developing it to meet the requirements of emerging challenges in the
energy market. Environmental sustainability and societal relevance
continue to shape the long-term growth strategy of your Company. It
follows a project based approach in CSR initiatives, which has helped
transform the lives of communities in and around its work centres and
On behalf of the Board of Directors and the entire Team GAIL, I thank
you for your untiring support in making us the Youngest Maharatna
Company of India. With the confidence reposed by you, we will continue
to pursue your Company''s Vision in a manner that develops trust and
maximizes long term value for all stakeholders.
B. C. Tripathi
(Chairman & Managing Director)