Reliance Industries Ltd and ONGC signs MoU for infrastructure sharing
The state-owned Oil and Natural Gas Corp. (ONGC) of India and Reliance Industries Ltd (RIL) inked a Memorandum of Understanding (MoU) that would enable them to share the infrastructure of the gas-rich D6 block on the east coast. The MoU is significant because it has the power to end the dispute of "alleged 'gold-plating' of costs in the deep-sea gas field of RIL," The Economic Times reported.
The MoU details how the infrastructure is going to be shared, what the additional requirements are, and what the commercial terms are, among others. The ONGC also said that sharing infrastructure enables to lower its capital expenditure while stepping up development of its gas fields. It expects to produce natural gas in four years with an estimated daily production of 6-9 million metric standard cubic meters.
A formal agreement is set to follow. "The companies intend to enter into a formal agreement after conducting a joint study which will be spread over the next nine months," the ONGC said.