RIL signs gas pact with fertiliser companies

Reliance Industries Ltd (RIL) on Friday signed the gas sales and purchase agreement (GSPA) with its customers in fertiliser sector for supply of natural gas to be produced from the KG-D6 block. The GSPAs were signed with 12 companies for supply of approximately 15 million standard cubic meters (mmscmd) natural gas at 15 different urea manufacturing facilities.

The duration of GSPA contract is five years at the gas price formula approved by the government. The companies which will be supplied natural gas from KG D6 include: Nagarjuna Fertilisers and Chemical Ltd, Rashtriya Chemicals & Fertilizer Limited, IFFCO, KRIBHCO, GSFC, GNFC, Tata Chemicals Ltd, National Fertiliser Limited, Chambal Fertiliser & Chemicals Ltd, KRIBHCO Shyam Fertilisers Ltd, IndoGulf Fertiliser and Shriram Fertiliser and Chemicals Ltd.

East-West Pipeline built by Reliance Gas Transportation Infrastructure Limited (RGTIL) would be used to transport gas from KG-D6 block to the fertiliser companies, by inter-connecting with pipelines of GAIL and GSPL, the company said in a press release.

The fertiliser companies also signed Gas Transportation Agreement (GTA) with RGTIL.

“With the signing of GSPAs, KG-D6 gas would reach all gas-based urea manufacturing units in India, and would eliminate the deficit in gas supply being currently faced by these units. The supply of natural gas to these units would result in additional production of approximately 7 million tonnes of urea per annum thereby reducing India’s import dependence and also reducing subsidies by the government,” said PMS Prasad, President and CEO (Petroleum), RIL.