For the first time, Reliance Industries Ltd is taking on a partner in its core business: petrochemicals. It plans to sign an MoU with GAIL (India) Ltd for jointly setting up petrochemical projects abroad and marketing their domestic output in the country.

According to the MoU, valid for three years, which comes up for ratification at the GAIL Board meeting on Friday, the two will explore opportunities to set up petrochem projects in gas-rich nations. The countries identified so far: Russia, the former Soviet Union states and Qatar.

The step is being taken as both believe there is a great upside to the plastics business with huge global potential. Since GAIL has cordial relations with the identified countries, it would be a win-win situation to set up projects at gas-head, says the proposal.

For each activity, including projects abroad, the two will float a special purpose vehicle company where both will hold equal equity.

As for the marketing tie-up, the two are looking at broadening their sales coverage, including product swapping. While RIL’s production units are located along the western border in Gujarat and Maharashtra, GAIL has a plant in Uttar Pradesh whose ethylene capacity is being expanded to 440,000 tonnes per annum from the current 300,000.