The Hindu Business Line : ONGC venture hopes to earn $120 m more through direct sales

THE joint venture of British Gas-Reliance-ONGC that operates the Panna, Mukta and Tapti gas fields is looking at earning an additional $120 million by selling gas at market rates in 2005-06 (April-March). The total revenue for this year is expected at $550 million.

ONGC will earn about Rs 1,000 crore by direct sale if subsidy benefit is passed on to the company, company officials told Business Line.

Of the total production of 11 million standard cubic metres of gas per day (mscmd) from the three gas fields on the western offshore, the joint venture will directly sell 4.8 mscmd at $4.08 per million British thermal units (mBtu). The remaining six mscmd are to be sold to GAIL (India) Ltd at $3.86 per mBtu.

"We will save a subsidy burden of about Rs 750 crore by selling gas to GAIL at a higher rate of $3.86 per mBtu and gain another Rs 250 crore by realising higher price through direct sale (to private parties)," an ONGC official said.

Earlier, the joint venture sold its entire gas output to GAIL at a price of $3.11 per mBtu.

However, GAIL is not lifting the entire quantity market for the company, which has resulted in closing of some wells.

"This would adversely affect our revenues. We can clock the extra earning of $120 million during the period only if our wells operate fully and the gas is picked up," sources said.

As per the understanding GAIL is expected to pick up the marked quantity and then supply the gas to fertiliser and power plants through the Hazira-Bijaipur-Jagdishpura pipeline.

Recently, the consortium has tied up with Gujarat State Petroleum Corporation Ltd, Gujarat Gas Corporation Ltd, Indian Petro Chemical Corporation Ltd, and Reliance for direct sale of PMT gas at $4.08 per mBtu.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Royal Classic `not keen on FDI or tie-up'

Competition Commission in a board-like avatar

RINL to raise Rs 2,500 cr to fund expansion — Keen to form jt ventures

Faber bullish on kitchen chimney segment

Govt may bring in changes in competition law

ONGC venture hopes to earn $120 m more through direct sales

Apollo's Perambra unit completes 30 years of operations