New Delhi: GAIL (India) Ltd has sought a review of the prices of natural gas produced by a consortium of Reliance Industries Ltd (RIL), BG Group Plc. of the UK and Oil and Natural Gas Corp. Ltd from Panna/Mukta and Tapti (PMT) fields, off the Mumbai coast.
Taking its cue from the fact that the government has asked a group of ministers (GoM) to look into the pricing of gas from RIL’s eastern offshore Krishna Godavari (KG) fields, GAIL last week wrote to the petroleum ministry seeking a review of natural gas prices from those oil fields.
“When the price of gas from KG basin is being looked into by the government, we in GAIL strongly feel there is enough scope for review of price paid to the PMT joint venture (JV) at the rate of $4.75 (Rs194.75) per million British thermal unit (mBtu), and also for supplying the entire volume of gas produced from PMT fields to GAIL,” the letter stated.
RIL had proposed to price gas from its KG-D6 field off the Andhra Pradesh coast at $4.33 per mBtu—a price that is now being looked into by the empowered GoM, headed by external affairs minister Pranab Mukherjee.
GAIL said the ministry had in March 2005 decided that the PMT JV shall supply only 6 million standard cubic metres per day (mscmd) of gas to it for one year at $3.86 per mBtu. A year later, it was decided that the JV shall supply in excess of 4.8 mscmd out of the total available gas (10-12 mscmd) at $4.75 per mBtu for two years, ending 31 March 2008. “Gas so purchased from the PMT JV is being sold to core sector consumers at administered price ($2.1 per mBtu) and the difference between the higher purchase price of PMT gas and the administered price mechanism gas is being adjusted under the pool mechanism.”