Date:05/12/2007 URL: http://www.thehindu.com/2007/12/05/stories/2007120554461800.htm

Business

GAIL, RIL to set up units abroad

Special Correspondent

To float SPV for petrochemical hubs

Joint working group to select sites in West Asia, Central Asia and Russia
The proposed plant will have a capacity
of 1.9-2 million tonnes

MUMBAI: Reliance Industries Limited (RIL) and GAIL (India) Limited on Tuesday signed a memorandum of understanding (MoU) for joint co-operation in petrochemicals.

Under the MoU, both companies will explore opportunities for setting up petrochemical complexes outside of India in feedstock rich countries. Identified opportunities will be examined by a working group, consisting of representatives from both companies.

A special purpose vehicle (SPV) will be formed for setting up the petrochemical complexes.

The working group will examine such opportunities in West Asia, Russia and former Soviet Union countries. In addition, the two companies will examine the possibilities of mutual co-operation in the domestic market.

Feedstock

Special Correspondent writes from Delhi:

The MoU was signed by RIL Executive Director Nikhil. R. Meswani and GAIL Director (Business Development) A. K. Purwaha in the presence of GAIL Chairman and Managing Director U. D. Choubey and RIL Chairman Mukesh Ambani.

The multi-billion dollar petrochemical plants in gas-rich West Asia, Central Asia or in oil rich Russia is likely to have a capacity of 1.9-2 million tonnes.

Mr. Choubey had recently held talks with authorities in Russia and Qatar and had indicated that this kind of a deal was in the offing in the near future.

The working group would select a proper site for the proposed project by March 2008. “We may also jointly take up integrated project involving production of feedstock and then converting it into value added products,” Mr. Choubey said in a statement here.

Natural gas or naphtha is likely to be the feedstock for the plant and the two companies, if allocated a gas field in the target countries, will look at jointly developing it and converting the gas into petrochemicals, the release adds.

The project details, cost, financing and equity will be decided once sites are selected and feasibility report commissioned. GAIL and RIL will have equal stake in the special purpose vehicles for the petrochemical project.

Reliance and GAIL already have an agreement for cooperation in the gas sector. The areas of joint cooperation identified include natural gas pipeline transmission and marketing.