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GAIL signs contracts to takeover PMT gas marketing

GAIL signs contracts to takeover PMT gas marketing
PTI
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First Published: Tue, Apr 01 2008. 11 40 AM IST
Updated: Tue, Apr 01 2008. 11 40 AM IST
New Delhi: In a landmark development, state gas utility GAIL India Ltd on Tuesday signed contracts for taking over marketing of natural gas produced from Panna-Mukta and Tapti gas fields.
GAIL signed a contract with the consortia of Reliance Industries, BG Group of UK and Oil and Natural Gas Corporation - who are the joint operators of the PMT fields lying in western offshore - for buying the entire 17 million standard cubic meters per day of gas produced from the fields.
It then signed contracts for sale of the gas to consumers, including RIL at the Government approved price of $5.7 per million British thermal unit.
“We have this morning signed contracts to takeover marketing of the gas from this fiscal,” GAIL Director (Marketing) B C Tripathi told PTI here.
GAIL, which was the official marketing agency of the PMT gas till 2005 when Petroleum ministry gave the rights to the field operators for an interim period, also contracted RIL for sale of 3.6 mmscmd of gas to its petrochemical plants.
About 5 mmscmd gas would be supplied to power and fertiliser plants, while 2.13 mmscmd gas would be sold to BG’s subsidiary, Gujarat Gas Co Ltd, for its city gas distribution projects in Gujarat and other consumers.
Another 1.1 mmscmd gas would be given to Gujarat State Petroleum Corporation (GSPC) for 15 days to meet the requirement of small consumers in Gujarat. After this period, GAIL will takeover the supplies to these consumers.
Tripathi said Torrent Power would get 0.9 mmscmd gas, while Rajya Vidyut Nigam Ltd (RRVUNL) 1.5 mmscmd gas. GAIL would get the remaining 2.8 mmscmd for extracting LPG from the fuel.
On instructions from the Prime Minister’s Office for a more uniform distribution of the natural resource, the Oil ministry had in December 2007 scrapped all contracts for sale of gas produced from PMT fields and nominated GAIL for selling it to ‘fuel-starved´ fertiliser plants outside Gujarat.
But after protests, the ministry agreed to partly restore 3.6 mmscmd of gas out of 5.1 mmscmd consumed by RIL’s petrochemical plants and 2.13 mmscmd from BG’s share of 3.05 mmscmd.
The PMO wanted to distribute the scarce resource evenly and not restrict it to just one state (Gujarat consumes 42% of the current natural gas supplies). It felt that when scarcity of the fuel was forcing plants elsewhere to run below capacity, Gujarat too should share the burden.
The Petroleum Ministry had in 2005 given the PMT joint venture freedom to market gas. It, however, in a surprise move in December 2007 decided to divert all the PMT gas to GAIL, barring quantities committed to RRVUNL, for sale at higher price of $5.7 per million British thermal unit.
Gujarat State Petroleum Corporation, which drew 1.3 mmscmd gas from PMT, would not get any from 16 April.
Panna/Mukta and Tapti fields are jointly operated by RIL, BG and Oil and Natural Gas Corporation. RIL and BG hold 30 per cent stake each in the region, while ONGC has the remaining 40%.
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First Published: Tue, Apr 01 2008. 11 40 AM IST