New Delhi: GAIL (India) Limited is set to play a crucial role in converting the mass transportation system of Beijing to CNG before the Beijing Olympics to be held in 2008. China has decided to introduce CNG in Beijing city for converting entire transport vehicles by 2008, before commencement of the Olympics.

Currently, Beijing has 20,000 buses and 80,000 GAIL hopes to bring down vehicular pollution levels significantly through this project as it did in Delhi and Mumbai.

GAIL is pursuing equity participation in Beijing Gas Company and Beijing Jianggang Gas for implementation of the CNG projects in Beijing City. Beijing Gas Company has the concession to introduce CNG in municipality area of Beijing. Beijing Jianggang Gas is a JV between China Gas Holdings Limited and Beijing Gas Company for supply of natural gas in the six suburban districts of Beijing.

While GAIL holds stake in China Gas Holdings, the later has a 49 per cent stake in Beijing Jianggang Gas company. During the recent visit of a GAIL team that included Proshanto Banerjee, chairman and managing director; discussions were held with China Gas Holdings Limited for GAIL's participation in CNG projects of Beijing municipality area as well as in the six suburban districts of Beijing.

It is understood that urgency is being assigned for large scale introduction of CNG in time bound manner.

GAIL has also been offered three cities in mainland China -. Wuhu city in Anhui province, Huainan and Yichang cities in Hubei province for CNG projects. The projects will be executed by JVs between GAIL and China Gas Holding Limited.

Considering GAIL's expertise in successful CNG projects in Delhi and Mumbai, China Gas Holding has proposed a separate JV arrangement to develop CNG business in China.

GAIL and China Gas Holdings Limited will also form a50:50 master JV for developing CNG projects in the existing as well as future projects of the Chinese company. Subsequently, the master JV will form Project Company for CNG in each of the identified cities which are serviced or would be serviced by China Gas Holdings Limited.

GAIL has made a strategic investment in China Gas Holdings Limited (CGHL), which has already secured concessions on exclusive basis for operation and management of natural gas including compressed natural Gas (CNG) and City Gas in 43 cities in China.

GAIL had signed a share subscription agreement with China Gas Holdings Limited during February 2005 and acquired 210 million shares of the China Gas Holdings Limited. The other shareholders of China Gas Holdings Limited are SINOPEC, a National Oil and Gas Company of China and Taiwan State Affairs of the State Council, a govt. body. KOGAS of Korea and City Gas of Singapore are also considering acquiring equity stakes in China Gas Holdings Limited.