Indo Gulf Fertilizer signed an agreement with Reliance Industries (RIL) to buy 0.228 million standard cubic metre per day of natural gas for its Jagdishpur plant.

RIL would sell this gas from its flagging eastern offshore KG-D6 fields and both the companies have signed a Gas Sales and Purchase Agreement (GSPA) in this regard, reports indicate.

It is learnt that both the firms are still working on an agreement to transport gas through state-owned GAIL India's pipelines. Supply of the gas would begin once the agreement is finalised.

Fertiliser cooperative IFFCO's Phulpur plant may also sign a similar agreement with RIL for procuring 0.27 mmscmd of gas, reports indicate.

There is a delay in signing a GSPA with the two urea manufacturing units even though the government had last year allocated KG-D6 gas to them. The delay is caused by differences over sales tax liability.

Meanwhile, it is learnt that the new agreements may reduce supplies to LPG extraction plants of GAIL. So far, the dwindling gas supplies from KG-D6 had been just enough to meet contracted demand for fertiliser and LPG units.