RIL, ONGC to make presentations on gas pricing

Reliance Industries (RIL) and Oil and Natural Gas Corp (ONGC) will tomorrow present their views as producers on pricing of natural gas to a panel of top government officials formed to resolve the vexed issue.

RIL, which is to begin natural gas production from the prolific Krishna Godavari-D6 block off the east coast from July 2008, and ONGC, which has also discovered substantial gas reserves on the eastern offshore, would make separate presentations to the Committee of Secretaries (CoS), official sources said.

CoS, comprising secretaries of petroleum, power, fertilizer, expenditure and law, would in the morning hear the consumers' perspective on natural gas pricing when the fertilizer ministry would make a presentation, and in the afternoon discuss the issue with gas producers.

The power ministry had on July 6 made a presentation to CoS, demanding gas at affordable prices for power plants to keep electricity generation costs low.

Sources said Power Ministry had demanded regulating pricing of natural gas, to be produced by Reliance from KG-D6, and said the current administered price of Rs 3.2 per cubic meters ($1.8 per million British thermal unit) for ONGC gas was the ideal price for power generation.

On RIL's proposed pricing formula for KG gas, the sources said gas price or formulae was "market-distorted" as price bids were called from buyers picked by RIL. The delivered price of gas of around $6 per mBtu to power plants would make power generation unsustainable, power ministry had said.