The Hindu Business Line : GAIL, Reliance sign pact for cooperation in gas sector

New Delhi March 15 GAIL India Ltd and Reliance Industries Ltd (RIL) are to work out modalities for transportation of natural gas through the pipelines of the public sector company from the various gas sources that the private sector company has in Krishna-Godavari and Mahanadi basin.

The two companies will also work out long-term arrangement with regard to gas supply and distribution.

The move comes after both companies entered into a memorandum of understanding (MoU) for cooperation in the gas sector here on Thursday.

The six areas identified for cooperation include CBM gas opportunities, city and local gas distribution, operation and maintenance (O&M) services, exploration and production and technology and knowledge sharing.

"The agreement, which would see better utilisation of our pipelines, is to the benefit of both. Within a month we should be signing an agreement with RIL," the GAIL Chairman and Managing Director, Dr U.D. Choubey, said at a press conference.

In a statement GAIL has said that the framework of the MoU emphasises on the need for both companies to examine the complementary nature of their facilities and build cooperation around them for mutual benefits.

The agreement has the potential to provide gas to GAIL for utilising its transmission capacity while at the same time assisting RIL to evacuate its natural gas.

The MoU is to see GAIL and Reliance discuss cooperation in the development of a gas grid and examine opportunities that may be available for optimal utilisation, sharing and inter-connectivity of their respective, existing and planned transmission and distribution networks.

Besides, it also provides for cooperation between the two companies in the purchase, sale and swap and marketing of gas and import of gas through trans-national pipelines.

Furthermore, both the companies shall share the pipeline capacity in Andhra Pradesh, Maharashtra and Gujarat on mutually agreed terms.

Later speaking to the media, Dr Choubey also said that GAIL is exploring the option of acquiring a stake in an operating gas field so as to ensure committed gas supplies.

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