GAIL (India) Ltd. on Friday signed a Memorandum of Understanding (MoU) with Shell Energy India for exploring ethane sourcing and other energy value chain opportunities. The state-owned natural gas distribution giant said that this is a step towards achieving improved sustenance in business operations.

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The natural gas distribution company is looking forward to importing ethane from countries having a surplus of ethane so that naphtha and natural gas can be replaced as feedstock in petrochemical plants.

GAIL seeks to do so from ethane-surplus countries having matured export terminal infrastructure via waterborne transportation to India, later transporting it further through the pipeline systems of GAIL to demand centres, the company explained.

Through the agreement signed with Shell Energy India, GAIL expects to dive into the prospects of importing and handling different hydrocarbons that serve as essential chemical and petrochemical precursors.

Earlier this month, the oil sector regulator, Petroleum and Natural Gas Regulatory Board (PNGRB) proposed to raise the average tariff across all pipelines for GAIL by 41 percent, and sought comments from stakeholders on the proposed hike.

In the December quarter, GAIL reported a 90 percent decline in net profit to Rs 397.59 crore compared to Rs 3,800.09 crore in the year-ago period due to losses in the petrochemical and natural gas marketing business.

Its revenue from operations rose to Rs 35,939.96 crore from Rs 26,175.60 crore in the same quarter last year, while all the segments of GAIL reported an operating loss.

Shares of GAIL ended 0.5 percent higher at Rs 110.1.

(Edited by : Rukmani Krishna)