-
Reliance expects gas prices to rise again in Oct
Reliance Industries Ltd expects prices of natural gas in India to rise again in October as its gas exploration business reaps the rewards of a global surge in energy prices that have already pushed the rates to a record high.
The conglomerate, controlled by billionaire Mukesh Ambani, expects the price cap for its KG-D6 gas sales to rise over the current USD 9.92 per million British thermal units, Sanjay Roy, senior vice-president for exploration and production, said in an investor call following the announcement of its quarterly earnings on Friday.
The government sets gas prices every six months based on international rates. The price of gas from old or regulated fields was more than doubled to a record USD 6.1 per mmBtu from April 1 and that for difficult fields like those lying in deepsea to USD 9.92. per mmBtu. Rates are due for a revision in October.
It is anticipated that the price of gas from old fields of state-owned Oil and Natural Gas Corporation (ONGC) will be hiked to about USD 9 per mmBtu and the cap for difficult fields will rise to double digits.
”In fact, we have also seen prices rise, as we know the gas markets are quite tight and prices have been elevated, and that effect we are seeing now in the revenues as well as improved EBITDA margins,” Roy said. ”Now, going forward, we expect ceiling prices to increase to USD 9.92 in the first half (of current fiscal that began on April 1) – that has been notified. And further, we expect increases going from there onwards in the second half of the year.” Reliance and its partner bp plc of UK produce about 18 million standard cubic meters per day of gas from two sets of new fields in the eastern offshore deepsea block KG-D6. Higher gas prices have helped the company’s EBITDA (pre-tax profit) from oil and gas exploration and production business to climb to a seven-year high.
Revenue from the segment rose 3.5 times to Rs 74.92 billion in 2021-22 (April 2021 to March 2022) fiscal while EBITDA surged 21 fold to Rs 54.57 billion. Reliance-bp, who commissioned R-Cluster field in December 2020 and Satellite fields in April 2021, are targeting to start production from MJ field in the same block by the end of the year.
After MJ starts, production is expected to reach 30 mmscmd in 2023.
Share This
