State-run Gas Authority of India said on Thursday that it will invest Rs 4000 crore (Rs 40 billion) in laying pipelines and expanding capacity of its Pata petrochemical complex this fiscal, with 60 per cent of the requirement being raised through debt.

"We have a capital expenditure outlay of Rs 4000 crore in 2004-05, of which Rs 2400 crore (Rs 24 billion) would be raised as loans," GAIL director (finance) J K Jain told a news conference in New Delhi.

"Our internal resource generation is about Rs 1,500 crore (Rs 15 billion) annually," GAIL chairman and managing director Proshanto Banerjee said.

This fiscal, GAIL is raising Rs 500 crore (Rs 5 billion) through bonds and an equal amount through term loans from banks.

GAIL is raising $150 million through external commercial borrowings and is inviting bids from a panel that includes ABN Amro, Standard & Chartered, Citibank, Deutsche Bank, Credit Lyonnais, BNP Paribas, Bank of America, State Bank of India, Bank of India, Bank of Baroda, Indian Overseas Bank, ICICI Bank, HDFC Bank, HSBC, Barclays and J P Morgan Chase.

It proposes to borrow $100 million with a green-show option to retain additional $50 million. The ECB would be used to finance capital expenditure, Jain said.

Banerjee said GAIL expects to maintain the 14.5 per cent growth it achieved in 2003-04.

"We will grow faster as we will also be selling 2.5 million tonnes liquefied natural gas being imported from this fiscal."

For 2003-04 fiscal, net profit jumped 14.5 per cent to Rs 1,878 crore (Rs 18.78 billion) as opposed to Rs 1,639 crore (Rs 16.39 billion) a year ago. Turnover reached a record Rs 12,449 crore (Rs 124.49 billion) against Rs 11,775 crore (Rs 117.75 billion) in 2002-03.

As per GAIL's annual plan for fiscal 2004-05, the capital expenditure has been estimated at Rs 3744 crore (Rs 37.44 billion), of which a major expense of Rs 1800 crore (Rs 18 billion) is likely to be incurred on the Dahej-Uran and National Gas Grid pipelines.

To fund the capital expenditure, the plan envisages a total external borrowing of Rs 2500 crore (Rs 25 billion) during 2004-05 by way of a mix of term loans from financial institutions/banks, bonds/debentures and foreign commercial borrowings.

GAIL has already drawn Rs 500 crore loan from Bank of India and raised Rs 300 crore (Rs 3 billion) through a bonds issue in March. It will draw another Rs 200 crore (Rs 2 billion) from State Bank of India in June.

Banerjee said GAIL will be taking up laying a gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal to take the re-gasified LNG to energy hungry markets in the east.

GAIL is part of the consortium, which is importing 5 million tonnes of liquefied natural gas from Qatar at Dahej in Gujarat, from where it is fed into GAIL's trunk Hazira- Bijapur-Jagdishpur pipeline network.

It would also expand the Pata petrochemical plant capacity by 100,000 tonnes, he said.