GAIL likely to sign gas deal with RIL to meet AP's gas need

Posted By: Religare
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GAIL likely to sign gas deal with RIL
In a bid to help the fuel-starving power units in Andhra Pradesh, the state run GAIL India is likely to sign a gas deal with Reliance Industries Limited (RIL) to provide 2.5 million standard cubic meters per day domestic gas to the state.

The gas would be arranged from the GAIL's share of LPG plant in RIL. Thereby, the shortfall would be met with imported gas by a revenue neutral swapping arrangement, said the sources familiar with the development.

"On request of Andhra government, the ministry has asked Reliance to supply D6 gas to the power plants and the original allottee would be supplied the same quantity of R-LNG without any additional cost," one official in the oil ministry said.

However, the swap would be temporary till May 31. This is second such swap since March last year following the scarcity of the fuel.

RIL's D6 gas has been allocated to Gail for extraction of liquefied petroleum gas (LPG). Therefore, the power plants getting the fuel from GAIL would be paying approximately USD 12 per unit cost for the domestic gas as the price difference between D6 and imported gas. D6 gas price is $4.2 per unit.

Read more about: gail india
Story first published: Monday, March 12, 2012, 13:32 [IST]
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