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Richa Mishra

New Delhi, March 15 Time is running out for GAIL (India) Ltd; the company is yet to get clear instructions from the Government on whom to sell the additional gas from the Panna-Mukta-Tapti (PMT) fields. In two weeks from now, GAIL will start marketing the entire 17.3 million standard cubic metres (mmscmd) of gas produced from these fields by the joint venture partners – Reliance Industries Ltd, British Gas and ONGC.

GAIL is currently getting 8.3 mmscmd of gas from the fields of which 3.75 mmscmd each goes to power and fertiliser plants, and 0.8 mmscmd to the LPG plant of GAIL.

Additional gas refers to the quantity which has not been contracted for till now. A senior GAIL official told Business Line the company was awaiting clear instructions from the Government on the issue.

Concerns were raised by a certain section of customers regarding the existing contracts entered into by the joint venture partners and whether the additional gas would be sold to priority sectors.

The Petroleum Ministry has nominated GAIL to market the entire gas produced from these fields starting April 1, 2008. GAIL would be paying the production sharing contract (PSC) price of $ 5.7 per million British thermal unit (mBtu) for the entire PMT output. It was earlier paying $ 4.75 per mBtu for its offtake.

The joint venture partners, allowed to directly market 4.8 mmscmd gas for two years (from April 1, 2006) , had entered into long-term gas supply contracts. GAIL was marketing the remaining 5.0 mmscmd from the initial output of 9.8 mmscmd. Output from the fields has since increased.

The official said “PMT gas would be supplied by GAIL in accordance with the Gas Utilisation Policy and the interests of city gas consumers and users of gas for feedstock such as fertiliser, power and petrochemical would continue to receive due importance.” The company would prefer a proper balance among priority sectors in accordance with the Gas Utilisation Policy and the existing consumers for sale of gas.

More Stories on : Petroleum | Outlook | GAIL (India) Ltd

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