New Delhi, Jan 03 (Agencies): State-owned Oil and Natural Gas Corp (ONGC) on Monday signed a cooperation agreement with GAIL India Ltd, giving the gas utility exclusive marketing rights of all the natural gas it will produce in future.

Under the agreement, GAIL will get the first right on all gas that ONGC will produce from any of its fields in future.

But in case GAIL is unable to get a 'good' price within 30 days, ONGC will take back the marketing right.

GAIL would also market some of the chemicals to be produced from the Dahej petrochemical complex being set up by ONGC Petro-additions Ltd, a subsidiary of ONGC, the two companies said in identical but separate press statements here. GAIL has 19 per cent stake in OPaL.

The agreements will be initially valid for three years and can be extended thereafter.

"This joint initiative will serve as a catalyst for effective monetization of gas from future fields of ONGC, with GAIL providing the infrastructure and marketing tie-up for supply to potential customers," the statements said.

The two companies also reached an understanding for possible swapping of available natural gas with a view to optimise the logistics and costs.

GAIL will be a co-promoter of the 1.1 million tons ethylene cracker petrochemical complex that OPaL is setting up at Dahej SEZ at a capital cost of Rs 19,535 crore.

"An understanding has also been reached for marketing of a portion of petrochemical products of OPaL by GAIL," it said. "GAIL and ONGC would also explore the possibility of setting up a downstream unit using Butadiene, a by-product of OPaL, to GAIL for manufacture of value-added products."

Commenting on the occasion, ONGC Chairman and Manging Director RS Sharma said negotiations on these agreements have been going on for quite some time and the  agreements initiated on Monday shall create a definitive road-map for business growth by both the entities and shall also reinforce mutual cooperation by two oil PSU giants.

GAIL Chairman and Managing Director BC Tripathi said GAIL and ONGC have had a very long and symbiotic association and Monday's development will certainly strengthen this business synergy for the mutual advantage for both the companies which will help promote long term energy security in the country.