State-owned Oil and Natural Gas Corp (ONGC) has said it has signed an agreement with Reliance Industries to explore possibility of hiring Mukesh Ambani-run firm's infrastructure facilities on the east coast.
"The Memorandum of Understanding (MoU) aims at working out the modalities for sharing of infrastructure, identifying additional requirements as well as firming up the commercial terms," the company said in a statement.
ONGC aims to cut capital expenditure as also expedite field development by using RIL's infrastructure. The infrastructure sharing would help in "early monetisation of its deep water fields adjacent to the fields of RIL."
ONGC plans to produce about 6 to 9 million standard cubic metres per day of gas by mid-2017 from G-4, KG-DWN - D & E fields in the first phase.
"The companies intend to enter into a formal agreement after conducting a joint study which will be spread over the next nine months," the statement said.
The MoU was signed by ONGC's head of eastern offshore assets Ashok Varma and RIL Senior Vice President (Development Projects) Naresh K Narang.
ONGC chairman Sudhir Vasudeva said, "it is a win-win situation not only for both the companies which are striving hard to accrete new reserves and put them on production at the quickest time but also for energy starved nation."