India GAIL in petchem talks with Qatar, Russia cos

NEW DELHI, Nov 14 (Reuters) - Indian state-run gas firm GAIL (India) Ltd (GAIL.BO) is in talks with Qatar Petrochemical Co and Russia's LUKOIL (LKOH.MM) as it looks to build a large petrochemical plant overseas to gain better margins.

"We are looking at setting up a mega petrochemical project overseas of 1.3-1.9 million tonnes a year," the firm's chairman and managing director, U.D. Choubey, said on Wednesday.

"It is in line with our strategy to set up a petrochemical project overseas where feedstock is available."

He said he had travelled to both Russia and Qatar last month and held discussions with company officials.

In Russia, talks were also held with petrochemical major Sibur.

Choubey said the plant could be located in either Saudi Arabia, Qatar or Russia depending on feedstock availability.

He said the proposed project was also likely to involve a private Indian firm.

Choubey declined to name prospective local partners but earlier this year GAIL signed a broad agreement with Reliance Industries Ltd (RELI.BO) for cooperation in the hydrocarbon sector, including setting up a petrochemical plant.

GAIL has also expressed an interest in buying equity in LUKOIL's onland gas-rich Block A in Saudi Arabia, Choubey said.

"We have also sought LNG (liquefied natural gas) from LUKOIL," he added.

LUKOIL has an 80 percent stake in the block while the remaining 20 percent is with Saudi Aramco.

GAIL is actively scouting for LNG imports as the government has mandated it to meet the gas needs of the Ratnagiri power plant -- formerly known as Dabhol -- from September 2009.

Choubey said his firm was also talking to Russian gas producer Itera for jointly setting up a compressed natural gas network in Moscow. (Reporting by Nidhi Verma, Editing by Mark Williams)