Reliance Industries, BP announce setting up of Joint venture 'India Gas Solutions'

MUMBAI: Energy major Reliance Industries and London-based BP Plc on Friday announced the formation of an equal joint venture in India that will focus on global sourcing and marketing of natural gas in Asia's third-largest economy.

The joint venture, India Gas Solutions, will also develop infrastructure to accelerate transportation and marketing of natural gas within the country, the companies said in a press statement.

BP acquired a 30% stake in the country's biggest gas fields, KG-D6, in a $7.2-billion deal to buy stakes in 21 blocks of Reliance. The deal was completed on August 30.

A few days ago, Reliance Industries and BP proposed that the infrastructure at the deep-sea D6 gas fields can be shared with neighbouring blocks of ONGC and GSPC to save development costs and raise government’s revenue from new output from the gasrich block.

The oil ministry officials and experts in the Directorate General of Hydrocarbons support the suggestion in principle, three people with direct knowledge of the matter said. The companies made the proposal at a recent meeting with ministry officials.

DGH officials said Reliance's infrastructure can be used by state-run firms ONGC, which will start production from an adjoining block by 2015, and Gujarat State Petroleum Corp, which is expected to pump gas from the same basin within two years.

Director General of Hydrocarbons SK Srivastava, the oil ministry and the companies did not respond to ET's queries.

RIL has so far spent $5.59 billion in developing the D1 and D3 fields in the D6 block, out of the approved capital expenditure of $8.8 billion.

The company has also developed the MA fields in the block, for which the government had approved expenditure of $2.23 billion.