Reliance, ONGC may get $4.50/mBtu for KG gas
Natural gas from the D6 block of Reliance Industries and the adjoining field of ONGC in Krishna Godavari basin may fetch a minimum price of $4.50 per million British thermal unit (mBtu).
The oil ministry-appointed committee for formulation of transparent guidelines for natural gas pricing has recommended that "valuation of natural gas be done based on most recent competitively determined price in the region."
For the gas from Reliance's KG-DWN-98/3 and ONGC's KG-DWN/98/2, the $4.50 per mBtu price currently charged for gas from Cairn India-operated Ravva Satellite field in the KG basin may become the benchmark, official sources said.
The $4.50 per mBtu price is 92% higher than the $2.34 per mBtu price proposed by Reliance to sell gas to state-run NTPC and an Anil Ambani Group firm through separate contracts. The price for Reliance Natural Resources, a Anil Ambani Group firm, was rejected by the ministry for lack of transparency while the NTPC price is yet to reach the ministry for approval.
Sources said the price of gas from Ravva Satellite field may go up to $5 per mBtu in 2009, when D6 reaches peak output of 80 million standard cubic meters per day and ONGC begins gas production.
For Ravva Satellite gas, the price is to be calculated through a formula where the projected average crude oil price in 2009 is to be divided by average oil price in December 2006 and multiplied by the current price of $4.50.
At the projected average price of $68.83 per barrel in 2009 and average price of $60.36 per barrel in December 2006, the Ravva Satellite price comes to $5.05 per mBtu.
The oil ministry-appointed committee for formulation of transparent guidelines for natural gas pricing has recommended that "valuation of natural gas be done based on most recent competitively determined price in the region."
For the gas from Reliance's KG-DWN-98/3 and ONGC's KG-DWN/98/2, the $4.50 per mBtu price currently charged for gas from Cairn India-operated Ravva Satellite field in the KG basin may become the benchmark, official sources said.
The $4.50 per mBtu price is 92% higher than the $2.34 per mBtu price proposed by Reliance to sell gas to state-run NTPC and an Anil Ambani Group firm through separate contracts. The price for Reliance Natural Resources, a Anil Ambani Group firm, was rejected by the ministry for lack of transparency while the NTPC price is yet to reach the ministry for approval.
Sources said the price of gas from Ravva Satellite field may go up to $5 per mBtu in 2009, when D6 reaches peak output of 80 million standard cubic meters per day and ONGC begins gas production.
For Ravva Satellite gas, the price is to be calculated through a formula where the projected average crude oil price in 2009 is to be divided by average oil price in December 2006 and multiplied by the current price of $4.50.
At the projected average price of $68.83 per barrel in 2009 and average price of $60.36 per barrel in December 2006, the Ravva Satellite price comes to $5.05 per mBtu.
posted by rtotla at
9:04 AM
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