GAIL (India) Limited and Indian Farmers Fertiliser Cooperative Limited (IFFCO) today signed a memorandum of understanding (MoU) for cooperation in natural gas sector related opportunities in India.

The two companies are looking at the possibilities of setting up a gas-based power plant and a fertiliser unit in the country.

The agreement was signed by  A K Purwaha, director (business development), GAIL and V K Bali, director (technical), IFFCO, in the presence of U D Choubey, chairman and managing director, GAIL and U S Awasthi, managing director of IFFCO, a joint press release said.

The two companies would jointly evaluate the potential of setting up of a gas-based power plant and other industries, including chemicals, fertilisers, compressed natural gas (CNG) and piped natural gas (PNG) in India and also explore the possibility of sourcing of natural gas / LNG for the identified projects, the release said.

GAIL and IFFCO would jointly carry out the feasibility study for identified projects. Based on the techno-economic report, a joint venture company between GAIL and IFFCO would be formed for implementing the projects.

''With the increased availability of natural gas in the country from eastern offshore, more gas is likely to be available for fertiliser sector, which may be used not only by existing gas-based fertiliser plants but also for other fertiliser plants in the country which are proposed to be converted to gas based,'' said Choubey.

''With 7,000 km of GAIL's natural gas pipeline network and upcoming additional 5,500 km pipeline of GAIL, pipeline infrastructure will not be a constraint for providing gas to the fertiliser industry,'' he added.

IFFCO managing director U S Awasthi described the signing of the MoU as a major milestone wherein a raw material supplier has joined hands with the consumer.

GAIL (India) Limited, is the country's premier natural gas company with activities ranging from gas transmission and marketing to processing (for fractionating LPG, propane, SBP solvent and pentane); transmission of liquefied petroleum gas (LPG); production and marketing of petrochemicals like HDPE and LLDPE and leasing bandwidth in telecommunications. It has a presence in power generation, liquefied natural gas (LNG) re-gasification, city gas distribution and exploration and production.

IFFCO is the world's largest manufacturer and marketer of fertilisers in cooperative sector and is primarily engaged in production and distribution of nitrogenous and phosphatic fertilisers. IFFCO has five state-of-the-art plants with a capacity to produce over 82 lakh tonnes of fertiliser per annum. IFFCO has also joint ventures in countries such as Oman, Senegal, Jordan and Australia etc.