Business & Economy

GAIL, ONGC sign three agreements for cooperation in field of natural gas

NetIndian News Network

New Delhi, July 24, 2012

Public sector gas major GAIL (India) Limited and oil and gas exploration major Oil and Natural Gas Corporation (ONGC) have signed three collaboration agreements for cooperation in the field of natural gas.

The agreements were signed here on Saturday in the presence of GAIL Chairman and Managing Director B C Tripathi and ONGC Chairman and Managing Director Sudhir Vasudeva, a press release from GAIL said.
The agreements include one on sale and purchase of gas from existing and new finds of ONGC to GAIL initially for a period of three years, with a provision for extending it further.
Under the agreement, the two companies have agreed to enhance the availablity and effective utilization of natural gas from new and upcoming fields of ONGC for supply of gas to customers through GAIL's infrastructure.
The two companies also signed a Swap Agreement and Sale and Purchase Agreement for supply / sale of LNG by GAIL to ONGC for shrinkage of C2+ Extraction at Dahej, from existing GSPA quantities from PLL and purchase of equivalent domestic gas made available by ONGC from domestic sources, subject to allocation by Ministry of Petroleum and Natural Gas. 
This will pave the way for commissioning of C2+ Extraction plant by ONGC. Pursuant to extraction, the C2+ components shall be supplied to OPaL for manufacturing petrochemicals at Dahej SEZ, the release said.
GAIL has around 19 per cent equity in OPaL and has around 38 per cent marketing rights of petrochemicals produced from OPaL.
A Shareholders Agreement (SHA) pertaining to ONGC Petro-additions Limited (OPaL) was also signed by GAIL and ONGC as Shareholders of OPaL.
In addition, a Polymer Marketing Side Letter to SHA was signed among GAIL, ONGC and OPaL under which GAIL has the right to market part of polymers produced by OPaL both in domestic as well as export markets. This arrangement is expected to enhance GAIL’s marketing share for polymers in the country.
Besides polymer marketing rights, as per the Polymer Marketing Side Letter to SHA, GAIL has the right to off-take butadiene produced in OPaL plant to produce value added products through a Special Purpose Vehicle (SPV).
NNN
NetIndian
www.netindian.in