Even as debate rages on the $4.20 per million British thermal unit (mBtu) price approved for Reliance Industries’ K-G basin fields, a Cairn India-led joint venture has discovered a market price of $6.75 per mBtu for the fuel from a field in the same basin.
Partners Cairn, Oil and Natural Gas Corp (ONGC) and Videocon have written to the government seeking an increase in the Ravva Satellite field gas price to $6.75 per mBtu, official sources said.
State-run gas utility GAIL India Ltd buys 0.9 million metric standard cubic metres a day (mmscmd) of output from Ravva Satellite fields at $4.30 per mBtu.
The new price sought by the Ravva consortium is 60 per cent more than the maximum price of $4.20 per mBtu approved for RIL’s KG-D6 fields for five years to March 2014.
Sources said GAIL, which markets the gas produced from Ravva and Ravva Satellite gas fields, had in October last year offered a price of $5.73 per mBtu for the fuel but the price was not acceptable to the joint venture partners.
Ravva joint venture in April this year invited offers from Vemagiri Power Generation Ltd of GRM Group, GVK Power and Infrastructure Ltd and Silkroad Sugar Pvt Ltd.
Silkroad offered a price of $6.75 per mBtu and accordingly the Ravva joint venture has asked GAIL to match the price, they said.
The $4.2 per mBtu price fixed for gas produced from KG-D6 fields of RIL was lower than the average of $5.51 per mBtu charged by UK’s BG-led consortium for Panna/Mukta and Tapti gas.
It was also lower than the $4.75 per mBtu for the UK firm’s Lakshmi fields.
Sources said the petroleum ministry has asked GAIL if it is willing to buy gas at the new price and in case the state-run firm refuses, the Ravva joint venture would have the freedom to market the gas produced from satellite field to private parties at a price not less than $6.75 per mBtu.
