The Hindu Business Line : GAIL in talks with ONGC for buying gas from marginal fields

GAIL (India) Ltd is in talks with the Oil and Natural Gas Corporation (ONGC) to amicably resolve the issue of commercial arrangement between the two entities for buying natural gas from ONGC's marginal fields off the West Coast.

This is following the Petroleum Ministry's suggestion that GAIL should take up the issue directly with ONGC, as this was a deal between the two commercial entities.

The Ministry had declined to get involved in the issue when GAIL (India) had approached it after ONGC did not respond to its request for information on unit cost of the gas from the marginal fields (pre-NELP blocks) of C-22 and C-24. ONGC has marginal gas fields of C-22, C-24, C-39, C-23, C-26, B-12 and North Tapti (C-1), which is to be sequentially exploited for sustained gas production.

It is estimated that these fields will give between 1.5- 2.5 million standard cubic metres of gas per day (MMSCD) for 14 years. Sources said that GAIL (India) was to purchase gas from these fields. For this purpose, it proposed to examine the feasibility of taking gas through its planned Dahej-Uran pipeline.

However, as the fields were not cost-effective, it was decided that ONGC would be allowed to sell gas at market rates, sources added. A GAIL official said that the company had sought details of technical issues and the unit cost of gas at the landfall point inclusive of offshore transportation charges. GAIL had made the request to ONGC in 2004. While GAIL was pushing for early monetisation of gas from the fields, there were reports that ONGC was in talks with private companies to sell gas, sources said. The Gas Linkage Committee had taken a decision in its meeting on November 22, 2002 that the utilisation plan of gas from C-22/C-24 fields was to be jointly decided by the Ministry, ONGC, OIL and GAIL.

Subsequently, ONGC offered the gas from C-22/24 fields to GAIL on same terms as Panna Mukta Tapti gas, a GAIL executive said.