Business Daily from THE HINDU group of publications
Friday, Jul 13, 2007
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Business Daily from THE HINDU group of publications Friday, Jul 13, 2007 ePaper |
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Corporate
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Corporate Disputes Industry & Economy - Petroleum
RIL’s proposal may set a bench mark for future gas pricing. Reliance is understood to have asked for a well-head price of $4.33 per mBtu
Our Bureau New Delhi, July 12 The Government expects to resolve the issue of natural gas pricing from Krishna Godavari Basin off the East Cost within a month. Speaking to newspersons, the Union Petroleum Minister, Mr Murli Deora, said, “Consultations are on and I hope the issue will be resolved within a month. The decision will be applicable to all producers of gas.” The issue came to the forefront when Mukesh Ambani-led Reliance Industries Ltd approached the Petroleum Ministry seeking approval for a pricing formula to derive a price for its KG basin gas. A Committee of Secretaries, headed by Cabinet Secretary, Mr K.M. Chandrasekhar, is looking into the issue. There are some indications that the CoS may be asked to submit the report to a Group of Ministers. ‘Intense debate’
According to sources, the GoM would then recommend its views to the Cabinet. RIL’s proposal has kicked off an intense debate as it would set a benchmark for future gas pricing. Strong views have emerged from the gas producers as well as the consumers, including the Anil Ambani group and the Andhra Pradesh Government. While RIL is understood to have asked for a well-head price of $4.33 per mBtu (excluding the marketing margins, transportation tariff and taxes), the consumers like the fertiliser sector favoured a delivered price of not more than $5 mBtu. Close on the heels of Mr Mukesh Ambani explaining the proposed pricing formula to senior Government officials, Mr Anil Ambani is understood to have met senior secretaries of the revenue, expenditure and fertiliser departments. Cairn pipeline
Meanwhile, the Government is likely to finalise Cairn India Ltd’s pipeline proposal for carrying crude from its Barmer field in Rajasthan next week. According to official sources, “It is a matter of two-three days. We have recommended that it (Cairn’s pipeline) becomes a part of the field development plan.” Cairn is partnering with ONGC in laying a 580-km pipeline to evacuate crude from its Barmer fields. Cairn needs to commence pipeline construction work 12 months before crude production starts in 2009. The pipeline project is estimated to cost around $700 million, to be shared between Cairn and ONGC in 70:30 ratio, as per their stake in the Barmer field.
Related Stories: More Stories on : Corporate Disputes | Petroleum | Reliance Industries Ltd
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