In order to encourage firms to produce natural gas from technologically challenging ultra deepsea, Reliance Industries (RIL) requested a committee headed by C Rangarajan to propose market-linked pricing.
C Rangarajan, who is the Chairman of Prime Ministers’ Economic Advisory Council, is heading a committee that is formed to examine terms of future contracts for exploration of oil and gas as well as basis for gas pricing.
In a letter to the committee, RIL said it has found very large gas reserves that need a price of over $10 per million British thermal unit to be developed and produced.
It also said that only market related prices can provide an incentive to help produce the vast domestic resources that either concentrated in small pools or are located in technologically challenging ultra deepsea.
RIL (and partner) BP have around 5.5 Trillion cubic feet of discovered gas resources which would require large amount of risk capital to be invested. Most of these discoveries would require price of more than $10 per million British thermal unit to be developed and produced, it said.
It currently gets paid $4.2 per mmBtu for the gas produced from its KG-D6 fields in Bay of Bengal. This rate is lower than what Cairn India gets in the neighbouring Ravva Satellite field in the same basin and UK’s BG Group-operated Panna/Mukta and Tapti fields in western offshore.
Leave a Reply
You must be logged in to post a comment.