Financial Daily from THE HINDU group of publications
Friday, Mar 03, 2006
Financial Daily from THE HINDU group of publications Friday, Mar 03, 2006 |
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Industry & Economy
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Petroleum March 10 deadline for gas pact Our Bureau
Current rates The price in the bids was $4.75/mBtu. GAIL currently pays $3.86/mBtu. The PSC price is close to $5.3/mBtu.
New Delhi , March 2 The deadlock on supply of six million standard cubic meter per day (MSCMD) of gas from the Panna-Mukta-Tapti (PMT) fields to GAIL (India) Ltd beyond March 31 is set to be resolved soon. At a meeting of all the stakeholders called by the Petroleum Secretary, Mr M.S. Srinivasan, here, it is learnt that a deadline of March 10 has been given for finalising the gas sale agreement (GSA) for the supply of six MSCMD of gas to GAIL. The Petroleum Ministry is also understood to have reiterated that GAIL would continue to be its nominee for taking this gas, sources said. Among others, the chiefs of the joint venture partners — ONGC, British Gas, and Reliance Industries — and GAIL attended the meeting.
Pricing formula
As for the price of the gas, sources said that it would be worked out as per the pricing formula provided in the product sharing contract (PSC) signed between the Government and PMT partners. The Petroleum Secretary is understood to have advised the parties concerned to finalise the agreement at the earliest and report back when the deal is completed. With this development, no cut is expected in the supply of gas to consumers along the Hazira-Vijaipur-Jagdishpur pipeline, sources told Business Line. At the meeting it is learnt that joint venture partners British Gas and Reliance Industries were opposed to the idea of extending the deadline beyond March 31. According to sources, the joint venture partners argued that they have invited bids and received response from other players for purchasing gas from PMT fields at a market related price. To this the Ministry is understood to have asked for the bid price received by the joint venture partners. The price offered in the bids was to the tune of $4.75 per million British thermal unit (mBtu), the gas being supplied to GAIL currently was at $3.86 per mBtu. However, since GAIL was agreeable to pay price as per the PSC, the joint venture partners had nothing to say. The PSC price is close to $5.3 per mBtu, sources added. The PMT partners had sought the Ministry' permission to sell six MSCMD of gas from the fields, currently being given to GAIL, directly to clients at market price from April 2006.
Related Stories: More Stories on : Petroleum | GAIL (India) Ltd
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