ONGC invites bids for KG basin gas
Indian state-run explorer ONGC has called on buyers to bid for natural gas from the deepwater fields of the KGDWN-98/2 block in KG basin off the east coast of India, according to a report published by The Indian Express on April 14.
ONGC is set to supply about 2mn m3/day of gas from the fields starting at the end of June. The company has invited offers for the sale of natural gas from the block for three to five-year terms, with the supplies to be delivered at Odalarevu onshore terminal in the state of Andhra Pradesh.
Potential buyers will be required to quote a price indexed to the price of Brent crude. However, the price payable by buyers will be capped at a maximum of $3.62/mn Btu for the six-month period starting in April, in line with prices for domestically produced natural gas set by the government, The Indian Express reported.
India has kept the regulated wholesale price of locally produced natural gas unchanged with effect from April 1, the Indian oil ministry's Petroleum Planning and Analysis Cell (PPAC) said last month. For the April 1-September 30 period, the price paid to most domestic natural gas producers will remain at $1.79/mn Btu. The current price is the lowest in almost a decade. The price of locally-produced gas is set every six months.
The ceiling price for gas from difficult-to-exploit fields such as deep water, ultra-deepwater and high pressure-high temperature areas was, however, reduced to $3.62/mn Btu from $4.06/mn Btu.
Sources at ONGC told The Indian Express that the company’s average cost of production for natural gas was between $3.5-4.0/mn Btu.