New Delhi: Cairn India-operated Ravva oil and gas field, off the Andhra coast, is likely to see an upward revision in price of natural gas produced from it after the current rates expire next month.
“The price of natural gas produced from Ravva and Ravva Satellite field are to be market-linked. Current rates expire on 30 November and new rates would be applicable from 1 December,” a source familar with the development said.
At present, state-run gas utility GAIL India buys gas from Ravva field at $3.5 per million British thermal unit and at $4.3 per mmBtu from Ravva Satellite field.
“Recently, the rates for gas from Panna/Mukta and Tapti field were fixed at $5.65 per mmBtu. This is an excellent benchmark and the market-related price for Ravva may also be fixed around the same levels,” the source said.
GAIL for the past three years has been getting 1 million standard cubic meters per day of gas from Ravva field at $3.5 per mmBtu and another 0.7 mmscmd from the adjoining Ravva Satellite field at $4.33 per mmBtu.
The price being paid to Cairn and its partners Oil and Natural Gas Corp (ONGC) and Videocon Industries, for Ravva and Ravva Satellite gas, is valid till 30 November, 2008, as per the Production Sharing Contract for the joint venture fields.
According to the source, GAIL was of the view that gas from the Ravva Satellite field was already priced at market rates given the fact that gas from Reliance Industries’ eastern offshore KG-D6 fields has been fixed at $4.2 per mmBtu.
“The company wanted price of gas from both Ravva and Ravva Satellite field be fixed at $4.33 per mmBtu but the joint venture partners want PMT price,” the source said.