ONGC and GAIL sign MoU for gas pipeline infra JV

New Delhi, July 24 (UNI) Country's upstream major Oil and Natural Gas Corporation Ltd (ONGC) today signed an agreement with GAIL for transportation, processing and marketing natural gas from the Krishna Godavari (KG) and the Mahanadi basin of ONGC.

Under the agreement, a joint venture company will be formed, the name of which is yet to be finalised.

The MoU was signed by GAIL Director (Business Development) A K Purwaha and ONGC Director (HR and Business Development) A K Baliyan in presence of ONGC chief R S Sharma and GAIL Chairman and Managing Director U D Choubey.

Under the MoU, the two companies have agreed to come together through a JV approach for monetising the gas reserves discovered by ONGC in the KG and Mahanadi basin. The two companies will set up a joint working group to chart out a suitable action plan for implementing the same.

The joint approach will help ONGC provide in quicker access of the discovered gas to the markets. ''To harness the natural gas, likely to come by 2011-12 and thereafter from the KG and the Mahanadi basin, this agreement is a landmark development for both the companies.'' GAIL CMD U D Choubey told reporters here.

He added that the post-2011 scenario would completely different for India.

Commenting on the development, Mr Sharma said, ''This MoU symbolises greater synergy and cooperation in the entire value-chain of the gas business.'' When asked about the KG basin issue, he said that the appraisal plan for the production is almost complete and will be submitted to the gas regulator, Directorate General of Hydrocarbons, by end of next month.

ONGC expects to produce 12 metric million standard cubic metres per day (mmscmd) of gas from a block in the KG basin from 2012.

''We expect our 98/2 block will produce at the rate of 12 mmscmd from 2012 and after receiving the approval from the regulator, a Working Development Programme will be implemented by the end of 2008 and early 2009,'' added Mr Sharma.

ONGC had discovered huge gas reserves in the KG and the Mahanadi basin on the eastern coast of India.

UNI