GAIL gets to market entire PMT gas

GAIL India, the country's largest marketer and transporter of gas, has bagged the rights to market the entire gas produced from the Panna-Mukta and Tapti (PMT) fields jointly which would add around Rs 550 crore to the company's revenues, a senior company official said.

The gas field in the western offshore, which is jointly operated by Reliance, British Gas and ONGC, currently produces 17 million cubic metres per day (mcmd) of gas. GAIL will get to transport and market the entire volume from April 1, 2008. It currently markets 4.8 mcmd of gas.

"With the incremental volumes for marketing, we will earn about Rs 100 crore annually by way of marketing margins and Rs 450 crore more annually from transportation charges," the official said.

In proportion to their equity in the block, ONGC, RIL and British Gas market 12.2 mcmd of gas from the PMT field.

GAIL, which currently does not get a marketing margin on PMT gas, would be allowed to charge $0.12 per million British thermal unit on the entire gas volume from April 1, 2008, the official said.

ONGC holds 40 per cent stake in these fields, while Reliance and BG India hold 30 per cent each.

In March last year, the petroleum ministry had allowed the joint venture partners to directly market 5.6 mcmd gas from these fields for two years till March 31, 2008, and give the remaining 4.8 mcmd to GAIL.

The output from these fields has now increased to around 17 mcmd. While GAIL's marketing share has remained the same, the joint venture partners have increased their direct sale of gas.

The ministry also found that the joint venture partners have entered into long-term gas supply contracts with customers, violating its March 2006 order of direct gas sales up to March 31, 2008.