GAIL (India) Limited, country's largest gas transmission and marketing company, has signed a Gas Sales and Transmission Contract (GSTC), with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) for supply of natural gas for 160 MW gas power plant of RRVUNL at Ramgarh.

Apart from latest development, GAIL also signed a Gas Sales and Purchase Agreement (GSPA) with the SGL consortium- the contractors of RJ-ON/6 block for supply of natural gas from the onland block in Rajasthan.

The GSPA has been signed for supply of 0.95 MMSCMD of natural gas for a period of 12 years. The natural gas will be supplied primarily to the 160 MW power plant of RRVUNL at Ramgarh. The gas sourced from the RJ-ON/6 block will be supplied to RRVUNL power plant through a 10 inch diameter, 90 km long pipeline.

GAIL is laying the pipeline at an estimated investment of approximately Rs 100 crore. The pipeline is expected to be completed by February 2010. The gas supply from the field is expected to begin by mid-April next year and total offtake quantity is expected to be available by April 2011.

RJ/ON-6 block situated in Shahgarh of Jaiselmer district was awarded by Government of India under NELP and Production Sharing contract was signed in June 1998. iServices Investment Limited has 45.5% participating interest whereas ONGC has 30%, Newbury Oil Company has 17.5% and Focus Energy has 7% participating interest in the block.

Focus Energy is the operator of the block.

Ahead of positive announcement, the shares of GAIL closed today at Rs 319 on BSE, up 1% compared to its previous close.