IOC to buy gas from RIL to save cost
New Delhi   13-May-2010

STATE-OWNED IndianOil (IOC) will buy 1.6 million cubic metres of natural gas a day from Reliance Industries Ltd (RIL) to replace costlier liquid fuel at its refineries.

IOC currently uses crude oil or fuel oil for production of hydrogen at its refineries, and natural gas from RILs eastern offshore KG-D6 field will replace the costlier fuel, a senior company official said.

"We have tied up with GAIL India for transportation of the gas and are now waiting to initial the gas sale and purchase agreement (GSPA) with RIL," he said.

Last year, an Empowered Group of Ministers (EgoM) had allocated 5.384 mmscmd of gas from KG-D6 to public and private sector refineries, against their demand for 22.8 mmscmd of gas.

IOC had demanded 6.58 mmscmd of gas for Its Gujarat, Mathura and Panipat refineries, but since refinery as a sector was allocated less than one-fourth of its demand, the firm is being proportionately given 1.6 mmscmd, he said.