Gas transmission & marketing company signs 15-year gas sale and purchase agreement with Oil India Ltd

GAIL (India) Limited has extended its Gas Sale and Purchase Agreement with Oil India Limited (OIL) for an additional 15 years, commencing from July 1, 2025. This significant deal involves the supply of up to 900,000 Standard Cubic Meters per Day (SCMD) of natural gas sourced from OIL’s Bakhri Tibba Block in Rajasthan, encompassing the Dandewala, Tanot and Bagi Tibba fields. The agreement, signed by Shri Sumit Kishore, ED (Marketing-Gas) for GAIL and Shri Ranjan Goswami, ED (BD) for OIL, underscores the collaborative efforts of both Maharatna CPSEs in bolstering India's energy security through efficient production, transportation and distribution of domestic natural gas. The gas procured under this agreement will be supplied to M/s Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL), a state-run power plant.

GAIL plays a pivotal role in India's natural gas infrastructure, operating a vast 16,421 km network of natural gas pipelines that transported over 127 MMSCMD in the financial year 2024-25. The company is actively pursuing new pipeline projects to further expand its reach. Beyond transportation, GAIL's petrochemical footprint includes a gas-based complex at Pata with an 810 KTA capacity and a 280 KTA capacity at BCPL. Furthermore, GAIL's substantial LNG portfolio, at 16.56 MMTPA (approximately 60 MMSCMD), accounts for 61 per cent of India’s total LNG imports. While the specific financial value in rupees for this particular deal with OIL was not disclosed, the agreement contributes significantly to GAIL's revenue streams and market position, alongside its strong presence in City Gas Distribution through its subsidiaries and joint ventures and its growing investments in renewable energy.

About GAIL (INDIA) LTD

GAIL is India’s leading gas transmission & distribution company with extensive gas transmission and distribution pipelines in the country, LPG extraction plants and a gas-based petrochemical plant, besides upstream oil and gas blocks and interests in LNG terminals in India. GAIL also has a global presence and business interests in the USA, Singapore, Myanmar, Russia, China and Egypt. Further, GAIL is pursuing business opportunities in the entire value chain of renewable energy and other clean energy ventures, including Green Hydrogen and Biofuels.

The company has a market cap of over Rs 1.20 lakh crore. The stock is up by 24 per cent from its 52-week low of Rs 150.60 per share and has given multibagger returns of 175 per cent in 5 years.

Disclaimer: The article is for informational purposes only and not investment advice.