GSPC's KG gas field viable under new pricing formula: Pradhan

Jumping to the defence of the Gujarat state-run GSPC, Union Minister Dharmendra Pradhan today said the KG Basin gas field is now "viable" under the new pricing formula and blamed the UPA government for arbitrarily fixing the gas price.
He accused the UPA of side-stepping the signed production sharing contract (PSC) and wondered why it was done.
While the PSC allowed pricing freedom, the UPA fixed a rate of USD 4.2 per million British thermal unit.
This rate was found to be economically not viable to produce gas from a highly complex field of GSPC in the KG basin. And GSPC rightly sought a higher rate, he said, adding that the BJP government has recently allowed pricing freedom for such difficult high-pressure, high-temperature fields.

The new pricing has made the field viable for production, Pradhan said during his intervention in the Rajya Sabha during discussion on the Finance Bill.
He claimed that the KG Basin field of GSPC was one of the top five challenging fields in the world as gas has be to taken out from 5,000 metres below sea level with a 400-metre vertical exploration.

Launching attack on the Congress for working with a particular company in mind, he said just before exit from power, the UPA had approved doubling of gas price keeping certain considerations in mind.
"In the energy basket, gas constitutes about 24 per cent. In India, gas constitutes about 7 per cent and in Gujarat, it is 25 per cent. It is possible only because of GSPC," he said complimenting Prime Minister Narendra Modi.

"What is the main fight? You (Jairam Ramesh) said it is not viable in 4.2. Who set 4.2? What was under PSC? Under it, gas explorers will have the freedom to fix gas price and will have marketing freedom. What was your compulsion that in 2005, you took gas pricing in government's hand?" the minister asked as he accused Ramesh of spreading lies.
He singled out wrong policies of the UPA for a drop in gas production in the country.