GAIL to invest in Russian projects; Rosneft may take stake in Mangalore gas plant

Mumbai: GAIL has signed a Memorandum of Understanding (MoU) with Russian oil and gas firm Itera for setting up petrochemical plants and city gas projects in Russia even as Russia's Rosneft proposed to invest in ONGC's Mangalore gas project.

Under the MoU, signed by the GAIL chairman and managing director UD Choubey and the Itera CEO Igor Makarov, the two companies will jointly set up CNG projects in Russia and explore possibilities of setting up a gas-based petrochemical plant in Russia.

The two energy utilities will also jointly invest in oil and gas exploration and production in Russia and CIS countries, an official from Russia's energy ministry told a business meeting in New Delhi.

Oil and Natural Gas Corporation (ONGC) is keen on taking a stake in Russia's Sakhalin-III and other oil and gas projects in eastern Siberia, while Rosneft is considering investment in the ONGC's LNG plant in Mangalore.

ONGC Videsh Ltd, the overseas arm of ONGC, has proposed to team up with Rosneft to bid for the giant Sakhalin-III project in Far East Russia. OVL currently has a 20 per cent stake in the 12 million tonne Sakhalin-I project operated by Exxon Mobil.

OVL is also eyeing oilfields in East Siberia, which is estimated to hold some 20 billion barrels of oil reserves. It is also looking at participating in Russian continental shelf. The 6.5 million sq km area is expected to hold oil and gas in 4 million sq km.

OVL is also eyeing exploration blocks in Russia's Timan-Pechora area and Sakhalin-3-and -6 projects, the giant Shtokman gas field and the Prirazlomneye oilfield.

India, the world's third-largest oil consumer, is aggressively chasing oil and gas assets overseas to meet fast growing domestic energy demand.