Sensing competition from the recent gas finds by the private sector, the state-owned Oil and Natural Gas Corporation (ONGC) has made a strong plea to the government for allowing it to charge market-determined prices for its gas from marginal fields.
In its proposal to the Gas Linkage Committee, ONGC said the development and production of gas from marginal fields should be considered on a different footing because production from these fields was not viable given the present natural gas-pricing regime.
ONGC has suggested that gas from marginal fields, therefore, should be sold at market-determined prices.
"However, the marketing and transportation of the gas may be done by Gas Authority of India Ltd as at present. Since the sale will be at market-determined prices, allocation of such gas through the committee will not be required," the corporation said.
Citing the example of its B-121 marginal gas field on the western coast, ONGC said the field was developed and put on production in 1997 and gas was brought to the Uran terminal through a process complex called SHP.
In March 1999, there was a fire, which was successfully put out in June. However, the surface facilities are damaged, and the installation is lying idle since then.
The corporation said it explored various options to put back B-121 on production for recovery of balance gas reserves estimated at 0.8 billion cubic metres and found that it would require an investment ranging between Rs 62-73 crore.
"At the current producer price of gas, it is not viable to make such an investment. On the other hand, if this structure is not put back on production, the balance gas reserves will remain bottled up," it added.
ONGC, therefore, has requested the government that even the B-121 marginal gas field may be taken out of the gas linkage committee allocation and the corporation may be allowed to rehabilitate this structure based on market-determined prices of gas.
