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Cairn Oil & Gas, a subsidiary of Vedanta Limited, has invited bids from prospective buyers of natural gas from its Rajasthan block.
“The company invites Expression Of Interest (EOI) from interested parties with proven capabilities and demonstrated presence in the natural gas business to participate in the national competitive e-auction process for the purchase of natural gas produced from our flagship block in Barmer, Rajasthan,” the firm said in a statement on Monday.
The price will be linked to spot prices of imported LNG, benchmarked against the Brent gas price, a company spokesperson said.
Cairn, along with joint venture partners, produces approximately 3.5 mmscmd of natural gas in Rajasthan, which is currently being ramped-up to more than 5 mmscmd, the statement said. The buyer would enter into a contract for 4.5 mmscmd of gas for two years, with the delivery point at Raageshwari Gas Terminal in Barmer.
Increasing production
Vedanta is ramping up production of the lucrative field even as the fate of the project remains tied up in multiple litigations. In October 2018, Cairn received a 10-year extension for the Barmer fields, Rajasthan, 25-year contract which was to expire on May 14, 2020. This was subject to the company agreeing to raise by 10 per cent the government’s share of profit from the production. But Cairn has contested this.
“For now, the Ministry of Petroleum and Natural Gas is giving the company extensions on its production-sharing contract (PSC) on a periodic basis as it does not want to disrupt production from the Balmer field,” a top ministry official has told BusinessLine .
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