October 12, 2008

RIL and GAIL join hands for overseas petro ventures

It is reported that Reliance Industries Limited and GAIL Indian have signed a MoU for joint co operation in petrochemicals. As per the agreement, Reliance and GAIL will explore opportunities outside of India and set up a joint working group that will examine opportunities in the Middle East, Russia and countries in the former Soviet Union. They will also set up a special purpose vehicle to set up petrochemical complexes abroad.

RIL, in a statement, said that the working group is examining opportunities in Russia, Qatar, Saudi Arabia, UAE, Algeria, Nigeria and former Soviet republics. In addition, they would also examine the possibilities of mutual cooperation in the domestic market.

Mr Mukesh Ambani chairman of RIL said that “GAIL and RIL are India’s leading companies in the energy and infrastructure sectors. The decision will enable us to look for opportunities globally on a competitive scale for the petrochemical business, which will further strengthen India’s position on the global map.”

Mr UD Choubey chairman of GAIL said that “This is an important milestone for both the companies. It is an extension of the concept of working together, which took shape with the signing of MoU in the natural gas sector between GAIL and RIL earlier this year. The MoU signed today is the beginning of cooperation in the area of petrochemicals.” He added that project details, cost, financing and equity will be decided once sites are selected and feasibility report commissioned.

As RIL gears up to bring gas from the Krishna Godavari basin in the market next year, it would require GAIL’s pipeline infrastructure to reach out to potential customers.