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Reliance re-launches auction for natural gas sale in line with new govt rules
Reliance Industries Ltd and its partner bp plc re-launched an auction for sale of natural gasfrom their eastern offshore KG-D6 block after incorporating the government’s new marketing rules to give CNG-selling city gas companies first priority over supplies.
Reliance and its partner BP Exploration (Alpha) Ltd (BPEAL) will sell 6 million standard cubic meters per day of gas in an e-auction planned for April 3, PTI reported, citing a tender notice. The price is indexed to the global LNG marker, JKM but will be subject to the government-notified ceiling price.
The partners had originally planned the auction in January but days before that the Ministry of Petroleum and Natural Gas, on January 13, published new rules for the sale and resale of gas produced from discoveries in deep sea, ultra-deep water and high-pressure-high temperature areas.
This led to the auction being suspended and is now being re-launched after incorporating changes. Gas produced from wells drilled below seabed is used to produce electricity, make fertiliser or turned into CNG for powering automobiles or piped to household kitchens for cooking as well as in industries.
The new government rules require bidders to state upfront if they were purchasing the gas through the auction for ‘own use as end consumers (including for use of their group entities) or as a trader. While end consumers were allowed to resale any unconsumed gas, traders participating in the auction were allowed to resell subject to a maximum trading margin of Rs 200 per thousand cubic meters.
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