On 15 March 2007, Reliance Industries signed a memorandum of understanding (MoU) for transporting Reliance's KG Basin gas through GAIL's existing 6,000 km pipeline and new pipelines by mid-2008.

Under the agreement, GAIL will have the right to market part of the gas transported through its network. Operation and maintenance of natural gas pipelines and sharing of technology related to gas sector are also part of the agreement.

RIL has identified 28 cities for the gas distribution projects and are in the process of identifying several other cities in the country. The company plans to invest Rs.1,000 crore in four years for the projects.

Reliance is also planning a 1,400 km pipeline from Kakinada in Andhra Pradesh to Ahmedabad in Gujarat for transporting gas from the KG basin. GAIL's pipelines will connect with this pipeline and feed gas into its Hazira-Vijaipur-Jagdishpur pipeline that will supply the gas to the northern parts of the country.

The two companies also agreed to transport gas from Reliance's coal bed methane block in Madhya Pradesh.

Reliance and GAIL are also likely to jointly bid for exploration and production blocks. They may bid jointly for blocks in the upcoming NELP VII.

Also See:

RIL, Gail finalise on K-G D6 gas evacuation (27-Feb-07)