The new natural gas price of $5.61, which is already among the lowest in Asia Pacific, is likely to drop to around $5 per unit in three years due to the variables included in the formula, Goldman Sachs has said.
´While the Indian government introduced a new gas price regime in October, we believe clear direction is needed on gas pricing for higher-cost projects, such as deepwater, to induce more E&P capex,´ the global financial major said in a report. Stating that Indian prices for new projects are among the lowest in Asia Pacific, Goldman said China pays explorers $11.9 per mmBtu (million British Thermal Unit) rate for new projects while Indonesia and the Philippines price the fuel at $11 and $10.5 respectively. Gas from offshore fields in Myanmar, where ONGC and GAIL have stake, are sold to China for $7.72. Thailand prices gas from new projects at $8.2 per mmBtu.