Public sector giants GAIL (India) and ONGC Ltd have entered into gas co-operation agreement for sale and purchase of fuel from existing and new finds of ONGC for three years.

The agreement has the provision of extending the agreement beyond three years, GAIL said in a statement.

“Under the agreement, the two companies have agreed to enhance the availability and effective utilisation of natural gas from new and upcoming fields of ONGC for supply of gas to customers through GAIL’s infrastructure,” it said.   

At the same time, both the companies have also agreed to sale and purchase of gas to be utilised at ONGC Petro additions Ltd (OPaL) in Dahej for extraction of high-value petrochemical products.

“This will pave the way for commissioning of C2+ (ethane) extraction plant by ONGC. Pursuant to extraction, the C2+ components shall be supplied to OPaL for manufacturing petrochemicals at Dahej SEZ,” the statement added.

GAIL has 19 per cent equity in OPaL and has around 38 per cent marketing rights of petrochemicals produced from OPaL.

In addition, a polymer marketing side letter to was signed among GAIL, ONGC and OPaL. This would facilitate GAIL the right to market part of polymers produced by OPaL both in domestic as well as export markets.

“This arrangement is expected to enhance GAIL’s marketing share for polymers in the country. Besides Polymer marketing rights, as per the polymer marketing side letter, GAIL has the right to off-take Butadiene produced in OPaL plant to produce value added products through a Special Purpose Vehicle (SPV),” it added.

Siddhartha.s@thehindu.co.in

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