New Delhi: India will examine a uniform domestic price for natural gas, which is now sold at rates ranging from $1 to $5.73 per million British thermal units (mBtu) depending on source, oil minister Murli Deora said on Thursday.
“A study to consider the feasibility of having a uniform cost price regime is being undertaken, the report of which is expected to be made available within three months,” he informed in a written statement.
Currently, the government fixes the price of gas produced from blocks given on nomination to state-run Oil and Natural Gas Corp (ONGC) and Oil India, while for others pricing is determined in line with the production sharing contracts.
Deora said gas from the nomination fields was sold at about $2 per mBtu, while in the north-east it was priced at $1-1.2/mBtu.
Prices range from $3.5-$5.73/mBtu for gas from the blocks that were awarded before the introduction of New Exploration and Licensing Policy (NELP) in 1999 and for which the block operators have signed contract with the government.
“The price of gas from imported regassified liquefied natural gas in respect of term contracts is over $5/mBtu. The spot price, however, varies from time to time,” Deora said.
The government has fixed a base price of $4.20/mBtu for the gas from Reliance Industries’ (RIL) deepwater D-6 block off India’s east coast, which is producing 35 million cubic metres a day (mmscmd).
The block in the Krishna Godavari basin was the first asset awarded in the NELP round that has begun production.
“Output from the D-6 block has increased India’s total gas production to 140 mmscmd,” Deora said.