Oil India Ltd, the nation's second largest state oil and gas producer, has signed a long-term agreement to sell natural gas produced from a Rajasthan field to GAIL (India) Ltd for 15 years.
The two firms signed a gas sale and purchase agreement (GSPA) on Wednesday, they said in separate but identical statements.
The GSPA is an extension of a current pact.
Under the agreement, which is effective July 1, up to 9,00,000 standard cubic metres per day of natural gas will be supplied from Oil India's Bakhri Tibba block in Rajasthan to a power plant operated by the state's electricity generation company. GAIL, which owns and operates a 16,421 km network of natural gas pipelines spread across the country, will wheel the gas to the power plant of Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL).
The agreement was signed by Ranjan Goswami, Executive Director (Business Development), OIL, and Sumit Kishore, Executive Director (Gas Marketing), GAIL, at GAIL's Corporate Office here.
"This agreement highlights the dedication of both Maharatna central public sector enterprises (CPSEs) in production, transportation and distribution of gas available from domestic gas fields," the OIL press statement said.
The firm said it remains committed to strengthening its upstream portfolio through continued exploration and development across the country, and GAIL plays a pivotal role in monetisation of gas.
GAIL said it transports 127 million standard cubic metres per day through its 16,421 km pipeline network. It is also working concurrently on execution of multiple pipeline projects to further enhance the spread.
Besides, it owns and operates a gas-based petrochemical plant at Pata in Uttar Pradesh and also has an LNG portfolio, which stands at 16.56 million tonnes per annum (about 60 mmscmd), accounting for 61% of India's total liquefied natural gas (LNG) imports.
