State-run gas firm GAIL (India) Ltd on Wednesday said it is in talks with Reliance Industries for laying a Rs 6,725 crore (Rs 67.25 billion) pipeline from Kakinada in Andhra Pradesh to Uran, near Mumbai to pipe natural gas from the private sector firm's gigantic gas fields in Bay of Bengal to the consumption centres in West and North.

GAIL has offered to lay the 1,100-km pipeline for RIL for a transportation tariff of 39 cents per million British Thermal Unit.

"Discussions are underway with RIL and other companies engaged in exploration of gas in Krishna Godavari Basin like Oil and Natural Gas Corporation, Gujarat State Petroleum Corporation and Cairn Energy for laying the pipeline," GAIL chairman and managing director Proshanto Banerjee told a news conference in New Delhi.

The proposed pipeline will traverse from Kakinada to Hyderabad to Pune and finally to Panvel, which would be connected to Uran. RIL gas can be pumped for consumption by its power plants or other industries in Mahrashtra and can also further be transported to its proposed mega power plant at Dadri.

"From Uran, the gas can be transported to Dahej through the under-construction Rs 1,416 crore (Rs 14.16 billion), 470-km Dahej-Uran pipeline. Dahej is on the HBJ trunk pipeline route which connects Dadri," senior company officials said.

However, RIL is not keen on GAIL laying the Kakinada-Uran pipeline, which forms part of the National Gas Pipeline Grid. Last week, RIL had argued that it can lay the pipeline at 70 per cent of the GAIL cost.

GAIL said the Rs 6,725 crore pipeline would have the capacity to transmit 40 million standard cubic metres per day of gas. Earlier, it had proposed Rs 4,727 crore (Rs 47.27 billion) cost for laying a pipeline with a capacity of 20 mmmscmd.

"We are constantly endeavouring to bring down cost and all the figures may change," Banerjee said.

RIL plans to use the 14.5 trillion cubic feet of gas reserves in D6 block in Bay of Bengal to fire its power plant in Dadri. Interestingly, the company has invited bids from prospective natural gas and LNG suppliers for the fuel requirement of the power plant in Uttar Pradesh.