GAIL India, Mukesh Ambani firm sign pact on KG-D6 gas

NEW DELHI: State-run gas firm GAIL India today signed gas transportation agreement with Mukhesh Ambani company RGPIL for evacuation of gas Reliance Industries will produce from KG-D6 fields.

GAIL signed Gas Transportation Agreement (GTA) with Reliance Gas Transportation Infrastructure Ltd (RGPIL) for using RGPIL's East-West pipeline to take KG-D6 gas to markets in western India, sources said.

GAIL will pay RGPIL Rs 1.3 per cubic metre (0.9 dollar per million British thermal unit) for using the 1,400-km pipeline from Kakinada in Andhra Pradesh to Baruch in Gujarat.

When contacted GAIL Chairman U D Choubey confirmed the agreement saying the fact would help evacuate gas to the customers.

RIL plans to begin production from its eastern offshore KG-D6 field from July 2008 with an initial production of 40 million standard cubic metre (MSCM) of gas per day. The production would be doubled in a year's time.

Sources said GAIL is to get 5-10 MSCMD of KG-D6 gas and today's GTA is for shipping the gas to customers. The two companies had in June signed a term-sheet whereby Reliance was to use GAIL's pipeline network in Andhra Pradesh and Maharashtra and Gujarat for taking its share of gas to the customers.

Sources said GAIL and RIL are likely to sign a Gas Sales and Purchase Agreement (GSPA) for the 5-10 MSCMD gas later this month.