The Hindu Business Line : ONGC, GAIL sign gas supply agreement

Oil and Natural Gas Corporation Ltd (ONGC) and GAIL (India) Ltd have signed a gas supply agreement (GSA) for the gas supplies from ONGC oil and gas fields. Prior to the execution of this GSA, sale and purchase of gas between the two companies was pursuant to a memorandum of understanding executed in 1990 and extended further in 1999.

The GSA signed on Friday has a tenure of 15 years and the price of gas will determined by the Government gas pricing order.

Gas deal

The gas produced by ONGC from its fields in western offshore, K-G Basin (Andhra Pradesh), Cauvery Basin (Tamil Nadu), Tripura, Gujarat, and Assam will be sold to GAIL under this agreement. GAIL would then market this gas to downstream customers connected to its pipeline network, predominantly to power and fertiliser customers. In the current financial year to March 2007, ONGC will sell GAIL 50 million cubic meters of gas a day.

Signing of the GSA between the companies further strengthens the relationship between these two Navratna companies on a long-term basis with due recognition of market forces and supply security, a statement issued by the two entities said.

Mr R.S. Sharma, Chairman and Managing Director, ONGC, and Mr Proshanto Banerjee, Chairman and Managing Director, GAIL, in the presence of Mr Murli Deora, Union Minister of Petroleum and Natural Gas, signed the GSA.

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