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RIL to charge higher margin on KG-D6 gas

RIL to charge higher margin on KG-D6 gas
PTI
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First Published: Mon, Mar 23 2009. 04 32 PM IST
Updated: Mon, Mar 23 2009. 04 32 PM IST
New Delhi: Reliance Industries Ltd (RIL) has raised by 25% the marketing margin on the natural gas it will sell from its eastern offshore KG-D6 field.
RIL, which is to begin gas production from the Krishna Godavari basin KG-D6 fields this week, has raised the marketing margin to $0.15 per million British thermal unit from $0.12 per mmBtu earlier, a source said.
The rate, which would be charged over the $4.20 per million British thermal unit base gas price, is however lower than the $0.18 per mmBtu margin charged by state-run GAIL.
The increase, he said, was due to the additional risk of ‘ship-or-pay’, an obligation under which the company would be obliged to transport the committed volumes or pay for the gas.
A company spokesperson did not offer any comments.
RIL has communicated the new marketing margin in the revised Gas Sales and Purchase Agreement (GSPA) to 12 identified fertiliser companies that will consume KG-D6 gas.
The fertiliser companies have opposed the revision but the two sides have considerably narrowed their differences and are likely to sign the GSPA by weekend.
The delivered price, including taxes and transportation charges, of Reliance gas in Andhra Pradesh would be $5.34 per mmBtu while in Maharashtra it would cost $5.87. In Gujarat it would cost $5.87 and along the HVJ pipeline $6.21.
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First Published: Mon, Mar 23 2009. 04 32 PM IST
More Topics: Reliance | KG-D6 | Krishna Godavari basin | RIL | GAIL |