State-run GAIL India Ltd has signed contracts for sourcing of natural gas from the PY-1 fields in the Cauvery basin.
GAIL signed a long term Gas Sales Contract (GSC) with Hindustan Oil Exploration Company (HOEC) for the PY-1 gas, a company press statement said here today.
The state-run gas utility also entered into a back-to-back agreement to supply the gas from PY-1 to PPN Power Generating Company Pvt Ltd for its power plant at Nagapattinam in Tamil Nadu.
“GAIL supplies are expected to commence shortly,” GAIL said, but did not give the price at which it is buying the fuel. The GSC is for 15 years.
For the first six years, GAIL will buy 51,000 million British thermal unit of gas from PY-1 per day. The duration can be extended on mutually agreed terms.
“GAIL is also entitled to receive additional gas, if any, from the field as per the terms of the contract,” the release said.
PY-1 is a pre-Nelp (New Exploration Licensing Policy) field, the production sharing contract (PSC) for which was signed in October 1995. The field covers an area of about 75 sq km and is situated in the offshore Cauvery basin. HOEC has 100 per cent stake in the field.
HOEC settles gas dispute HOEC today said its ongoing dispute with GAIL in relation to sale of natural gas from the PY-1 Field has been settled.
In a filing to the Bombay Stock Exchange, HOEC said as the operator of PY-1 Field, it had executed a tripartite settlement agreement with GAIL India and PPN Power Generating Company in this regard.
The tripartite settlement agreement entails termination of natural gas sale and purchase agreement with PPN and settlement of the ongoing dispute with GAIL in relation to sale of natural gas from PY-1 field.
HOEC, which has a 100 per cent operated participating interest in PY-1 Field, expects it to generate an annual revenue of more than $65 million upon reaching first plateau production.
The PY-1 is an offshore field of Cauvery Basin.
Shares of the company reacted to this news in a positive manner and surged over 4 per cent in early morning trade to witness an intra-day high of Rs 366.70.
