GAIL, Reliance to cooperate in India's gas sector

GAIL (India) Ltd. and Reliance Industries Ltd. have signed a memorandum of understanding (MoU) for cooperation in India's gas sector.

Offshore staff

NEW DELHI, India -- GAIL (India) Ltd. and Reliance Industries Ltd. have signed a memorandum of understanding (MoU) for cooperation in India's gas sector.

The areas of joint cooperation identified by the MoU are: natural gas pipeline transmission and marketing, coal bed methane gas opportunities, city and local gas distribution, operations and maintenance services, exploration and production, and technology and knowledge sharing.

Under the MoU, the companies will work out how natural gas will be transported from the various gas sources in the Krishna-Godavari and Mahanadi basins on the east coast through pipeline and long-term arrangements with regard to gas supply and distribution.

The framework of the MoU emphasizes the need for both companies to examine the complementary nature of their facilities and build cooperation around them for mutual benefit.

Under the MoU, GAIL and RIL will discuss cooperation in the development of a gas grid and examine opportunities for optimizing use, sharing, and interconnectivity of their respective existing and planned transmission and distribution networks.

The MoU also provides for cooperation between GAIL and RIL in the purchase, sale, swap, and marketing of gas and importing gas through transnational pipelines. City gas distribution in India will be one of the major growth segments in the next 5-10 years, GAIL says, and the MoU envisages the companies working in this area also.

"This is a turning point for both the companies. It is also a reinforcement of the concept of working together in the natural gas sector. This MoU is the beginning of cooperation in the areas of pipeline and evacuation of natural gas from various fields," says U D Choubey, CMD, GAIL. Choubey says there is a need to synchronize the activities of producers, transporters, and end users, noting that GAIL plans to provide pipeline connectivity to Reliance gas fields within the shortest possible time.

"GAIL and RIL are India's leading companies in the energy and infrastructure sector. This is a good beginning, and we see a lot of synergies in GAIL and RIL working together, which will not only benefit the two companies, but more importantly will benefit our customers and society at large," says P M S Prasad, president and CEO, petroleum, for Reliance.

3/15/2007

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