ONGC-RIL to sell Panna-Mukta gas to Gail at $4.75

The consortium of Oil and Natural Gas Corporation (ONGC), UK-based BG Group and Reliance Industries will sell 5.4 million cubic meters per day of gas from the Panna/Mukta and Tapti fields to Gail at $4.75 per million british thermal unit (MBTU) - about a dollar more than the present price.

This was agreed to at a meeting of the consortium and Gail (India) called by petroleum secretary M S Srinivasan today.

"The consortium will continue selling 5.4 mmmscmd of gas from the fields to Gail for two more years beyond the expiry of the current contract on March 31, 2006," an official source said.

Gail, which currently pays $3.86 per MBTU to the constortium, would have had to pay $5.73 per MBTU for the gas if the formula prescribed in the field contract was implemented. However, Srinivasan urged the consortium to sell the gas at the maximum price it was getting from selling the remaining 4.8 mmscmd of gas.

Last week, ONGC had struck a deal with Torrent Power of Gujarat for sale of 1.5 mmscmd of gas at $4.75 per MBTU, and this was set as the benchmark price, sources said.