New Delhi: Reliance Industries, India's most valuable company, and state-run gas firm GAIL India today joined hands to set up a multi-billion dollar petrochemical plant in gas-rich Middle-East, Central Asia or Russia.

"It will be a mega petrochemical plant with a capacity of 1.9-2 million tons," GAIL Chairman and Managing Director U D Choubey said from Mumbai after his firm signed an agreement with Reliance for exploring possibility of setting up the petrochemical complex.

Reliance, the nation's largest petrochemical maker, and GAIL will jointly study opportunities in Russia, Qatar, Saudi Arabia, UAE, Algeria, Nigeria and former Soviet republics for the petrochemical complex, he said while indicating that the two firms were in all likelihood forge an equal partnership.

"We have formed a joint working group to select sites in three countries by March," Choubey said. "We may also jointly take up integrated project involving production of feedstock and then converting it into value added products."

Natural gas or naphtha are likely to be the feedstock for the plant and the two companies, if allocated a gas field in the target countries, will look at jointly developing it and converting the gas into petrochemicals.

A memorandum of understanding was signed by RIL Executive Director Nikhil R Meswani and GAIL Director (Business Development) A K Purwaha. The agreement was exchanged by Choubey and RIL Chairman and Managing Director Mukesh Ambani.

Choubey said project details, cost, financing and equity will be decided once sites are selected and feasibility report commissioned. "All I can tell you is that it will be a mega petrochemical plant, potentially costing billions of dollars."

The two entities are likely to float special purpose vehicles having equal stake for the petrochemical project.

Source : PTI