GAIL India and Reliance Industries Ltd (RIL) have signed a memorandum of understanding (MoU) for wide-ranging cooperation in the gas sector.

The two will cooperate in natural gas-pipeline transmission and marketing, CBM gas opportunities, retail gas marketing, operations and maintenance (O&M) services, exploration and production and technology and knowledge sharing. 

GAIL and RIL will now work out the modalities to transport natural gas from RIL's gas sources in the Krishna Godavari and Mahanadi basins on the East Coast through GAIL's pipeline and long-term arrangements for joint supply and distribution of gas. The two companies will also share pipeline capacity in Andra Pradesh, Maharashtra and Gujarat.

Under the framework of the MOU for both companies will share their infrastructure and RIL would supply gas to GAIL in exchange for utilising its transmission capacity while GAIL would assist RIL to carry its natural gas and share the inter-connectivity of their respective transmission and distribution networks, both current and those that are added in the future.

They will also cooperation in the purchase, sale, swap and marketing of gas and import of gas through transnational pipelines.

Describing the development as a major event, Dr U D Choubey, chairman and managing director, GAIL, said, "This is a turning point for both the companies. It is also a reinforcement of the concept of working together in the natural gas sector. This MoU is the beginning of cooperation in the areas of pipeline and carrying natural gas from various fields".

Choubey said that GAIL would provide pipeline connectivity to the Reliance gas fields within the shortest possible time.