ONGC GAIL sign agreement for marketing gas and petrochemicals
merisarkar news service
New Delhi, January 04, 2011
ONGC-GAIL sign pact for gas marketing
ONGC and GAIL signed this pact on the first working day of the year 2011. Both the companies reached a landmark understanding for mutual business growth covering natural gas as well as petro-chemicals.
Board Members and senior functionaries from both organizations and members from ONGC Petro Additions Limited (OPaL), a joint venture promoted by ONGC, were present on the occasion.
Both companies would work together for exclusive sale of natural gas produced by ONGC from its various fields to GAIL during next 3 years.
Will lead to definitive road map: RS Sharma
This joint initiative will serve as a catalyst for effective monetization of gas from future E&P fields of ONGC, with GAIL providing the infrastructure and marketing tie-up for supply to potential customers.
This integrated effort of ONGC and GAIL shall also increase the availability of firm gas sourcing for infrastructure projects. The two companies also reached an understanding in swapping gas available to both the companies so as to optimise the logistics and costs.
Commenting on the occasion, RS Sharma, CMD, ONGC observed that mutual negotiations on these agreements have been going on for quite some time and the agreements initialed today shall create a definitive road-map for business growth by both the entities and shall also reinforce mutual cooperation by two oil PSU giants.
An understanding has also been reached for marketing of a portion of petrochemical products of OPaL by GAIL. GAIL and ONGC would also explore the possibility of setting up a downstream unit using Butadiene, a by-product of OPaL, to GAIL for manufacture of value-added products.
As for OPaL, the agreements initiated today signify GAIL formally agreeing to become a co-promoter of 1.1 MMTPA Ethylene Cracker Petro-chemical complex, under implementation in Dahej SEZ area, at a capital investment of Rs.19,535 crore.
Symbiotic relationship: BC Tripathi
BC Tripathi, CMD, GAIL stated on the occasion that GAIL and ONGC have had a very long and symbiotic association and this agreement will certainly strengthen this business synergy for the mutual advantage for both the companies which will help promote long term energy security in the country.
These agreements are expected to be formalized into definitive agreements immediately after approvals of respective Boards.
