Gas Authority of India Ltd, the country's largest gas distributor, and Turkey's Botas Petroleum Pipeline Corp, will sign a pact to jointly build cross-country pipelines and gas retailing projects, India's junior oil minister said.

"The Memorandum of Cooperation may be signed by the middle of the year 2003," Santosh Kumar Gangwar told Parliament on Thursday.

After signing the agreement, the two firms will identify projects, which could be jointly implemented in India, Turkey and other countries, he said.

"Separate project-specific agreements will then be entered for such identified projects."

The proposed agreement also envisages cooperation in distributing compressed natural gas, developing gas processing facilities, retailing gas in residential areas and underground gas storage projects in the two countries, he said.

Earlier this month, state-run Gail said it was in talks with Royal Dutch/Shell for equity in city gas projects in Egypt.

The company supplies compressed natural gas to some 57,000 vehicles in New Delhi, where the fuel is being promoted to reduce air pollution. It is talking to companies in Iran, Bangladesh, Indonesia and Kazakhstan for cooperation in the use of CNG as automotive fuel.