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GAIL (India) Limited(A Government of India Undertaking­

A Navratna Company)

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Subject: New Research & Development Project Proposals ~Reference: Our earlier letters dated July 5, 2011 & July 13, 201V-

GAILIPARC/R&D/Proposals/20 13/0 1

Kind Attn.: ProfR.K.Shevgaonkar

Dear Sir,

August 6, 2013

As you may be aware, GAIL (India) Limited is India's largest Natural Gascompany involved in Natural Gas Transportation and Distribution. We also havebusiness interests in several fields related to natural gas and its derivatives likeLiquid Hydrocarbons, LPG Transmission, Petrochemicals, City Gas Distribution,E&P and Power. GAIL has taken good strides in its business and is India'syoungest Maharatna Company. A brief on GALL's activities is also available atGAIL's website: www.gailonline.com

GAIL employs the best-in-class technologies in all its operations. GAIL laysspecial emphasis on regularly updating and improving its processes and systems tokeep pace with latest technologies. GAIL recognizes the importance of R&D toimprove its technological capabilities to remain competitive. GAIL pursues afocused R&D strategy to further its competitive edge in its existing businesses byimproving operational efficiency while also exploring new resources of energy tomeet the growing demand oflndia's populace for clean energy.

GAIL intends to spend at least 1% of its PAT on R&D efforts and has embarked onR&D Strategy to help achieve its goal. Also, GAIL has a well-documented Policyto give thrust to R&D activities. GAIL also has a Research Advisory Council(RAC) comprising of external experts to recommend and guide our R&D efforts.

GAIL is pursuing over 20 R&D projects through various Institutes / Laboratories inthe Thrust Areas (the Project list is available on our website). GAIL is interested tofurther broad base the R&D efforts and hereby requests R&D proposals from yourfaculty/scientists on innovative ideas that can be customized for GAlL's businessapplications.

Contd ... 2/-

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Natural Gas - Clean Energy, Green Energy

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GAIL (India) Limited(A Government of India Undertaking­

A Navratna Company)

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GAIL is already pursuing the following Projects with your esteemed Institute:

i) Development of Single Polymer Composite materials as light-weight modularsystems for temporary structures (PI: Dr- Samrat Mukhopadhyay)

ii) Design and Fabrication of Photovoltaic I Fuel Cell (PYI FC) Hybrid System(PIJHYiresh Dutta)

The &D Proposals need to be in the Thrust Areas (Refer Annexure-I) andsynergistic to GAIL's business areas_ Although we are keen to pursue application­oriented Projects that can be commercialized in the near to medium term butfundamental research projects that can provide good value in the long-run are alsoof interest to us.

We request your good self to widely circulate this letter amongst your faculty Iscientists to enable submission of R&D Project proposals for sponsorship. AFormat for submission of Proposals along with Draft clauses governing the projectproposals is enclosed at Annexure-II & III for immediate reference and ease ofsubmission I evaluation. Though the R&D proposals can be sent on a continuousbasis, the proposals received by 31.8.2013 shall be considered in our next meetingofRAC scheduled during September-2013_

We shall be glad to provide any clarifications, if required, on the matter includingdirect discussions with the concerned.

We now look forward to an encouraging response from your end.

Thanking you and With Regards,Yours Sincerely,

(y). V. ~. ~~{lvv1.LGlgl's

(M. V. Ravi Someswarudu)General Manager (R&D)

Email: mvravis@gaiLco.in

Encl : As above

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Natural Gas - Clean Energy, Green Energy

Any projects onimproved safety in

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Annexure -I

THRUST AREAS: GAIL'S R&D

The R&D thrust areas, identified by GAl L at present, are as follows:

a) Energy Efficiency/ Conservation in Process Plants/ Pipelines:improvements which can result into conservation of natural resources,process plants / pipelines etc.

b) Corrosion Protection! Monitoring of underground Pipelines: Any projects which are targetedfor improvement in life span for the pipelines; which may result into ease of operationalmonitoring etc.

c) Process Optimization: Optimization of the existing processes in the process plants /compressor stations and application of new technologies for improved ease, processintegration, and for improved operational flexibility, energy savings etc.

d) Process De-bottlenecking Techniques: De-boltlenecking of the existing systems which maybe a result of improved equipments, systems, processes with a view to reduce the specificconsumptions and increased productivity

e) Development of New catalysts or Substitution of Proprietary Catalysts: Applications with aview to gain technological advantage in the long-run.

t) Development of new Polymer Grades including bio-degradable polymers: Such type ofapplications with a view to develop technologically superior products for better applicationsand also environmentally friendly products

g) Conversion of C02 to value added products: To enable leveraging the utilization prospectsof the C02 released in the gas processing

h) Development of Glass Reinforced Epoxy Pipes / High Strength Steel Pipes: Suchdevelopment should leverage in reduced costs of the gas / liquid pipelines

i) Micro & Nano Materials: Such materials could be used in improvement of processes innatural gas and other business areas of GAIL

j) Fuel Cells - Reformer for natural gas conversion: For improved efficiencies in the gasutilization and also conversion of natural gas / hydrogen to power for wider range ofapplications

k) Development in Renewable Technology: Such renewable technologies could be Organicmaterial based Photo-voltaic cells in Solar energy; improved materials and applications inother renewable energy areas etc.

I) Gas Hydrates/ Shale Gas/ UCG : Any applications oriented towards absorption andassimilation of new technologies in the new business areas of GAIL

m) Direct Conversion of Methane to Olefins: To enable continue to the existing GAIL'soperations, even if faced with low feedstock availability in future

n) Satellite Monitoring of Pipeline network integrity: For improvement in the pipelinemonitoring systems for its integrity

0) Transportation Sector: Products and processes for applications in CNG in transportationsector including applications of ANG

p) Liquefaction Technologies: Products and processes for applications in GTL, LNG sectors

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Annexure -II

CHECK-LIST FOR SEEKING R&D PROJECT PROPOSALS FROMEXTERNAL AGENCIES

S.N. Description RemarksI. Title Title should reflect the R&D work to be

undertaken2. Organization Details

• Name Agency to provide details to ensure that the

• Address expenditure incurred on the Projects gets

• Legal status (indicate ifCSIR, Engineering qualified as R&D expenditure, as per DPE

Institution-Government! Private, University, guidelines.

Government Department, Corporate Body,Registered Society, Private Company etc.)

A brief write-up about the Institute to beprovided ( mentioning the funding pattern of theInstitute)

3.. Briefon GAIL & Relevance of the project to To be elaborated.GAIL's business

4. Details of Principal Investigator (PI) CV of the PI to be provided. The CV should also

• Name include the details on completed and ongoing

• Designation Projects undertaken and their Publications.

• Department Details of similar Projects executed by the

• Address & Contact details Agency, if any, to be provided

5. Details of Co-Principal Investigator (CPI) CV of the Co-PI to be provided. The CV should

• Name also include the details on completed and

• Designation ongoing Projects undertaken and their

• Department Publications.

• Address & Contact details6. Nature of Project: To be elaborated by the Agency.

• Basic Research

• Applied Research

• Application oriented Research

• Laboratory I Bench-scale

• Pilot Scale

• Prototype I demonstration model

• Design / Basic Engineering work

• Modeling & Simulation

• Others (Please soecifv)7. Declaration from PI That hel she has not submitted I working on

similar Proiect idea with anv other omanization.8. Undertaking trom PI That to the best of hisl her knowledge, hisl her

proposed Work is innovative and not carried outby any other group. Moreover, it has not beenreported in any Research Publications.

9. Obiective of the Project To be elaborated by the Agency10. Methodology I Work-plan To be elaborated by the AgencyII. Project Milestones To be elaborated by the Agency12. Expected outcome & Del iverables of the Project To be elaborated by the Agency13. Potential benefits to GAlLI Relevance to GAIL To be elaborated by the Agency14. Draft Report to include Way Forward I To be elaborated by the Agency

Recommendations I brieF on requirements forfUither commercialization

15. Total Budget with break-up: IA briefjustification for the expenditure to be

• Equipment . provided by the Agency

• Manpower

• Consumables Also, it is to be clarified whether the total cost

• Travel & Training (quotation) is gross of taxes & duties. In case of

• Contingency applicability of taxes & duties, levies etc. extra,

• Institute Overheads the break-up for the same to be provided by the

• Taxes (service tax etc.) Agency.

16. Custody of the equipment purchased in the Clarity is required in the Proposal itself.Project after completion

17. Payment Terms To be preferably linked with project milestones(Last payment of 5 to J0% after submission ofFinal Report).Agency to indicate whether Institute is exemptedfrom Income Tax (If so, TDS exemptionceltificate is to be enclosed along with theproposal).

18. Project Monitoring: Through Qual1erly Report Draft Clause is provided at Annexure-liand review at GAIL / Institute by a Joint ProjectTeam (JPT) led by PI.Mid-course modifications, if any

• Minor technical changes by JPT

• Major technical course correction to beappraised to GAIL's RAC

19. Results of Proiect : Patents & Publications Draft Clause is provided at Annexure-III20. Confidential ity Draft Clause is provided at Annexure-III2J. Arbitration Draft Clause is provided at Annexure-III22. Force Maieure Draft Clause is provided at Annexure-Ill23. Warranty / Guarantee Clause Draft Clause is provided at Annexure-Ill24. Insurance / Indemnification Clause Draft Clause is provided at Annexure-III25. Jurisdiction Draft Clause is provided at Annexure-III26. Contract Performance Bank Guarantee (CPBG) It may be mentioned whether CPBG can be

provided to GAIL.27. Price Reduction Schedule (PRS) It may be mentioned that all efforts would be

made to complete the Project milestones as peragreed time-lines.

28. Project is on lump sum, finn & fixed cost basis Agency to confirm acceptability that the projectcost is on Lumpsum, firm & fixed cost basis.

29. RTGS Form For e-transfer of payments. To be provided bythe Agency along with the proposal.

30. Project proposal to be submitted / sent by the --agency through concerned Administrationdepartment with covering letter

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Annexure - III

DRAFT CLAUSES FOR R&D PROJECTS (for reference purpose)

1. PROJECT MONITORING

A Joint Project Team (JPT) compnsmg members from the Institute/ Laboratoryundertaking the R&D project (Illstitute) and GAIL will be constituted by nominating oneor two representative(s) each to the JPT. The coordinator of the JPT will be the PrincipalInvestigator (PI) of the Project. One of the .lPT members from GAIL's side shall be theGAIL's Engineer-In-Charge for the Project. The .lPT will be responsible for carrying outa technical review of the Project and shall prepare a detailed programme for meeting themilestones as per the agreed timelines, in line with the Scope of Work and Work Plan.

Institute shall submit a Quarterly Progress Report on the Project to GAIL. The JPT shallmeet on a Quarterly basis in GAIL / Institute to monitor the Project's Progress and finaloutcome. The JPT shall be responsible for review of the Project and its mid-termcorrection, if necessary.

In case, the Project faces any difficulties in meeting the desired Objectives and needsmajor mid-course correction, the matter shall be appraised by the IPT to GAIL'sResearch Advisory Council (RAC) for necessary advice and approval.

Any increase in financial outlay of the Project shall be permissible onJy with the approvalof GAIL through Amendment of Letter of Award (LOA).

2. RESULTS OF THE PROJECT

(a) PATENTS

i) If the results of the investigations are such that IPR could be secured through legalinstrument i.e. Patents etc. then Illstitute shall apply, secure, defend and maintainthe IP rights with intimation to GAIL. The Intellectual Property (lP) generated inthe Project shall be shared equally between GAIL and Institute, the extent ofownership being equal. The procedural formalities for securing and maintaining theIP Rights shall be the responsibility of Illstitute. The expenditure incurred thereofshall be borne equally by Illstitute and GAIL. The decision on whether IP shouldbe secured and the territory where these shall be secured and the time for whichthese shall be secured, shall be decided by GAIL and Illstitute jointly at theappropriate time.

ii) GAIL shall have the rights to commercially exploit/use the technology developedunder the Project. No additional payments would be made by GAIL to the Illstitute.

iii) Illstitute, would however, retain the rights to use the R&D results generated duringthe Project for their own R&D programs as well as reporting in their academic Iinternal project reports without any obligation to the other.

iv) GAlLI Illstitute shall have the right to License the lP generated in the Project toothers in consultation with each other. The premia! royalty accruing from Licensingor Sale of the IP to other Party(ies) shall be shared equally between GAIL andInstitute.

(b) PUBLICATIONS

Illstitute and GAIL shall consult each other before any pubIication in respect of theProject. Publications shall be in the name of the research personnel of Illstitute and GAILassociated with the Project who have contributed to the work. In all the publicationsmade by Illstitute, it will be duly acknowledged that the project work has been carried

out under funding from GAIL. It is expressly understood that it shall be the responsibilityof the party publishing the information to take necessary precaution to avoid anyproblems in securing the IP of the Project. in future.

3. CONFIDENTIALTY

Institute and GAIL would maintain strict confidentiality and prevent disclosure thereof,of all the information and data exchanged / generated pertaining to work under thisProject except to those who reasonably require the same for execution of the Project.

4. FORCE MAJEURE

Institute shall not be held responsible for non-fulfillment of its obligations under thisAgreement due to exigency of one or more of the Force Majeure events such as, but notlimited to Acts of God, War, Flood, Earthquakes, Strike, Lockout, Epidemic, Riot, Civilcommotion etc. provided on the occurrence and cessation of any such event, Instituteshall give a notice to GAIL within one month of such occurrence or cessation. If theForce Majeure conditions continue beyond six months, the Institute and GAIL shalljointly decide about the future course of action.

5. WARRANTIES / GUARANTEES

It is expected that the Institute shall carry out the work diligently in accordance withprudential scientific practices and principles, governing such work, with a view to enablefurther work and ultimate commercialization. Accordingly, the Institute shall standguarantee / warranty to the results of the tests and claims made in the Final report /deliverabJes submitted by them, as a part of the Project.

6. INSURANCE / INDEMNIFICATION

Institute shall carry out the Work under the Project Witll due professional standards. It isexpressly understood that the personnel engaged by the Institute for the Project are notemployees of GAIL. Therefore GAIL shall not be liable for any kind of claims,proceedings, damages, costs & expenses of any nature on account of such personnel orthe processes applied / used by the Institute. Institute shall protect & fully indemnifyGAIL from any such claims.

7. ARBITRAnON

In the event of any dispute or difference in the interpretation and applications of theprovisions of the Contract, such disputes or differences shall be resolved in accordancewith Arbitration and Conciliation Act, 1996. The venue shall be New Delhi.

8. JURISDICTION

All suits in respect of this contract shall be under the jurisdiction of the courts in NewDelhi.

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