State-owned IndianOil (IOC) and Hindustan Petroleum Corp (HPCL) signed contracts with Reliance Industries to buy natural gas

IOC, HPCL in pact with RIL for KG gas



State-owned IndianOil (IOC) and Hindustan Petroleum Corp (HPCL) have signed contracts with Reliance Industries to buy natural gas to replace costlier liquid fuel at their refineries. IOC has signed a Gas Sale and Purchase Agreement (GSPA) for buying 0.8 mmscmd of gas from RIL's eastern offshore KG-D6 fields, while HPCL has inked a pact for 0.2 mmcmd, officials at the state-owned firms said. KG-D6 gas will replace crude oil or fuel oil that IOC and HPCL use for production of hydrogen at their refineries. IOC would use the gas at its Koyali refinery in Gujarat, while HPCL would take the fuel at its Mumbai unit, they said, adding that supplies are likely to begin in a week's time. Originally, IOC was allocated 1.6 mmcmd of KG-D6 gas for use at its Koyali and Mathura refineries, but the agreement for the Mathura unit could not be signed due to sales tax issues with the Uttar Pradesh government.
Economic Times, New Delhi, June 17, 2010