Cairn Inks Indian Gas Agreement
Cairn announces that it has signed a Heads of Agreement with Gas Authority of India Limited for the sale of gas by Cairn to GAIL for the Andhra Pradesh market. The HOA provides that Cairn and GAIL will, on an exclusive basis, enter into discussions forthwith with the intention of signing a Gas Sales Agreement by Q4 2002. The gas will be supplied from Cairn's existing discoveries, including the Annapurna gas field.
The HOA also provides that the parties will cooperate in the sharing of information with respect to the market for natural gas in specified southern Indian states and such other areas of India as they may mutually agree with a view to agreeing additional gas sales agreements and/or a joint marketing agreement for such markets.
Proshanto Banerjee, Chairman of GAIL, commented: 'We are pleased that we are able to leverage the success of our good relations with Cairn and our pre-eminent market position to move forward with these gas sales arrangements. There is an existing shortfall of gas in the Andhra Pradesh market which we can meet using Cairn's gas and our existing infrastructure. Our planned infrastructure expansion in southern India will provide the opportunity to extend this successful relationship to other markets.'
Bill Gammell, Chief Executive of Cairn, commented: 'This exclusive Agreement for the Andhra Pradesh market evidences the strength of our relationship and builds on the success of our existing Gas Sales Agreements with GAIL for the Ravva field. We look forward to repeating the success of our other developments in the Indian subcontinent through early monetisation of our substantial gas discoveries and additional potential in the Krishna-Godavari basin.'