Reliance Industries (RIL) and leading gas marketing firm GAIL India may form
a joint venture (JV) for transporting gas in the country. The venture would be
separate from the proposed JV between the two partners for city gas
distribution.
The two companies are weighing various options including forming a JV which
would be different from the existing model followed by GAIL for city gas
distribution ventures. The equity stake of two partners in the proposed gas
transmission venture is yet to be determined. RIL's pipeline network from
Kakinada in Andhra Pradesh is likely to form a part of the proposed JV.
A partnership between the two is beneficial for both the partners. GAIL has
the capacity to carry 130 MMSCMD of natural gas across the country through its
6000 km of pipeline networks and would add another 5,000 km in the next five
years. But it is able to use only 55 per cent of its existing infrastructure
since there is lack of supply.
On the other hand, RIL would need both infrastructure as well as marketing
network to evacuate and sell gas produced from the KG basin. The private sector
major has found huge gas reserves in KG basin. Gas production is expected to
start from mid-2008. Recently, the company has discovered another new natural
gas reserve in the D6 block (KG basin).
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