Money News

GAIL, Reliance Ind sign gas transportation pact

MUMBAI (Reuters) - State-run gas transporter GAIL (India) Ltd has signed a deal with a Reliance Group firm to transport gas from Reliance Industries’ fields off India’s east coast, GAIL said.

Under the deal, GAIL would also buy capacity in Reliance Gas Transportation Infrastructure Ltd’s 1,400-km pipeline, which is under construction and due to connect Andhra Pradesh to Gujarat, GAIL said in a statement.

The statement, released at the weekend, said that with the gas transmission deal finalised, the two firms would now sign specific contracts, but did not give further details.

GAIL and Reliance Industries agreed in March to explore options jointly to transport and sell Reliance’s gas from its deep-sea fields in the Krishna Godavari (KG) basin and set up city gas distribution networks across Indian cities.

Reliance, which discovered India’s largest gas field in the KG basin in 2002, is spending about $5.2 billion to develop and $3.5 billion to maintain production from its gas fields.

Shares in GAIL rose to a life high at 501.95 rupees in early trade and by 0720 GMT they were trading 5.1 percent higher at 494.95 rupees in a Mumbai market down 0.2 percent.

However, Reliance Industries shares were down 0.6 percent at 2,824.45 rupees.