ONGC and GAIL India Signed Agreement

State-run Oil and Natural Gas Corporation (ONGC) and GAIL India (GAIL) on 3 January 2010 declared that they reached landmark agreement to ensure mutual business growth in the areas of natural gas as well as petrochemicals. The Public Sector Units (PSUs) signed agreements as well as exchanged documents in this respect. In respect of fostering the gas business, the companies agreed to work together for exclusive sale of natural gas produced by ONGC from its various fields to GAIL during the next three years. The companies agreed to swap gas available to both the companies so as to optimise logistics and costs.

GAIL agreed to become a co-promoter of 1.1 million tonnes per annum (mtpa) ethylene cracker petrochemical complex, under implementation in Dahej SEZ area, at a capital investment of Rs.19535 crore. An understanding enabling GAIL to market a portion of petrochemical products of OPaL was reached. Both ONGC and GAIL will explore the possibility of setting up a downstream unit using butadiene, a by-product of OPaL, to manufacture of value-added products.

Joint endeavour of ONGC and GAIL will help in effective monetisation of gas from future exploration and production fields of ONGC with GAIL. ONGC and GAIL will work together to provide the infrastructure and marketing tie-up for supply to potential customers. As a result of the joint venture increase the availability of firm gas sourcing for infrastructure projects will increase.