NEW DELHI: In a step towards cooperation in the gas sector, public sector Gas Authority of India Limited (GAIL) and Reliance Industries Limited (RIL) on Thursday inked an umbrella agreement for joint working partnership in natural gas, pipeline transmission and marketing, coal based methane gas opportunities, city and local gas distribution, operations and maintenance services, exploration and production and technology sharing.

A memorandum of understanding was signed between the two organisations here on Thursday. R. K. Goel, Director (Finance), GAIL, and P. M. S. Prasad, President and CEO, Reliance Petroleum Limited, signed the MoU on behalf of their companies in the presence of GAIL Chairman and Managing Director, U. D. Choubey.

Under the MoU, the two companies will now work jointly for transportation of natural gas from the various gas sources of RIL in the Krishna-Godavari and Mahanadi basins on the East Coast through pipeline and for long-term arrangements with regard to gas supply and distribution. It has been agreed that wherever there is capacity available in the existing pipeline of GAIL, the same would be available on the principle of common carrier for better capacity utilisation.

Describing the MoU as a major development, Mr. Choubey said, "this is a turning point for both companies. It is also a reinforcement of the concept of working together in the natural gas sector. The MoU is the beginning of cooperation in the areas of pipeline and evacuation of natural gas from various fields.''

`A good beginning'

Mr. Choubey emphasised the need to synchronise the activities of producers, transporters and end users and said GAIL would provide pipeline connectivity to the Reliance gas fields within the shortest possible time.

Speaking on the occasion, Mr. Prasad said ``This is a good beginning and we see a lot of the synergies between GAIL and RILworking together would not only benefit the two companies, but also benefit customers and the society at large.

The MoU provides for cooperation between GAIL and RIL in the purchase, sale, swap and marketing of gas and import of gas through trans-national pipelines. Further, the two companies will share pipeline capacity in Andhra Pradesh, Maharashtra and Gujarat on mutually agreed terms.

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