GAIL, ONGC Likely To Tie Up For Marketing

New Delhi: GAIL (India) Ltd has attained an understanding with ONGC for sourcing and marketing the latter''s gas from Krishna-Godavari and Mahanadi basins. A joint venture between ONGC and GAIL could be in the offing for buy of gas from new sources to be developed by ONGC in the two assets. Gail said that a broad understanding had been attained on marketing, and the quantum of gas and pricing will be worked out subsequently, depending on the development plans of ONGC.Presently, KG basin is being looked at as a major source of gas with exploration companies such as ONGC and Reliance Industries Ltd striking gold there. With the proposed joint venture, GAIL will not only have access to new source of gas, but will also be able to better use its existing network of pipelines as well as expand its infrastructure. While gas production from ONGC''s existing fields in Rajahmundry has increased by 0.57 million standard cubic metres per day (mmscmd), this has been offset by the natural decline in production from wells of other existing fields. Additional sourcing of gas will also help GAIL conceive new networks in the markets of Andhra Pradesh and neighbouring States.