Mumbai: Gail (India) Ltd is in talks with Reliance Industries Ltd (RIL) to pick up a stake in K-G basin gas fields as part of a broad pact being negotiated by the two firms for a possible pipeline and city gas distribution joint venture.

The draft MoU for cooperation between the state-run Gail and the Mukesh Ambani-led company states that Gail "shall consider farm-in opportunity in RIL's D6 field on mutually acceptable terms. Further, both parties may jointly explore farm-in opportunities in other blocks owned by them".

As per the MoU, RIL would supply gas from its K-G field to GAIL, which would distribute it through its pipeline network to consumers across the country. The states identified for cooperation include Rajasthan, Gujarat, Karnataka, Kerala and West Bengal.

"Gail and RIL shall mutually discuss the possibility of jointly developing the pipeline infrastructure from K-G basin for integrating with Gail's existing pipeline grid, so that gas from the RIL field could be brought to market centres across the country," the draft MoU says.

The draft MoU provides for the two companies to float a joint venture to supply piped natural gas to domestic and commercial sectors as well as CNG to automobiles.

Officials of the two companies were unavailable for comments. Sources, however, said the two companies were likely to finalise the MoU in a month's time.