Mumbai, Nov. 4: Cairn India will supply crude from its Rajasthan block to Reliance Industries.

Cairn has recently commenced crude production from the Mangala field at Barmer in Rajasthan. The company will supply the feedstock to RIL’s refinery at Jamnagar in Gujarat.

The agreement with Reliance comes after the government allowed private refiners to buy the Rajasthan crude.

The oil will be delivered to RIL’s Jamnagar refinery through heated crude oil tankers, Cairn India said today.

As in the case of government nominees Indian Oil and Mangalore Refineries and Petrochemicals, the commercial terms, including the price for the initial offtake of the Rajasthan crude, have been concluded with RIL, Cairn said.

The implied price realisation represents an average 10-15 per cent discount to Brent on the basis of prices prevailing for the six months to September 2009.

Cairn has also urged the Centre to nominate additional offtake arrangements, and discussions with other private refiners are in progress.

Cairn has set up a terminal at Mangala to process the crude before it is evacuated for sale.

It will process crude from the Mangala, Bhagyam and Aishwariya fields. The terminal is designed to process 205,000 barrels per day of crude with scope for further expansion.