Category

Countries

Gas Sales Restarts in Indian by RIL And BP Under New Regulations
Gas Sales Restarts in Indian by RIL And BP Under New Regulations

Gas Sales Restarts in Indian by RIL And BP Under New Regulations

  • 24-Mar-2023 5:25 PM
  • Journalist: Emilia Jackson

A natural gas auction in the east which was expected to restart by BP and Reliance Industries (RIL) got suspended by the partners primarily due to a recent modification in the Indian government's marketing regulations concerning about the re-sale of gas sourced from deepwater, ultra-deepwater, as well as high pressure and hot temperature fields that cap trading margins. According to the government's updated marketing regulations, the auction, is likely to reschedule for March 31 which will further prioritize supplies for city gas companies that sell compressed natural gas (CNG), shadowed by fertilizer companies, power plants, and other consumers and traders.

The government has prioritized gas supply to the city gas distribution network over other sectors since late last year, which coincides with the changes to the marketing rules. Additionally, in accordance with the rules, bidders must also indicate whether they wish to buy gas through the auction for their own use or for resale.

Furthermore, RIL and BP would increase the length of supply from the three years offered in the January auction to five years, with supplies set to begin somewhere in the month of April. Where gas will be rated using a formula based on an Asian index, but the price will not exceed a ceiling set by the government.

In addition to that as per the recent data, this year's gas auction available for resale to the residential gas and urea industries at a maximum trading margin of around 200 rupees per 1000 m3. Also, as per the tender, the minimum bid for "V" is $0.42/mn Btu and the highest bid is $2.01/mn Btu. For gas produced from deep-sea fields or the price determined by bidding, the price will be less than the government-set ceiling price. According to the ministry, the contractor must offer gas to bidders from the CNG (transport) and PNG (domestic) sectors, fertilizers, LPG, and power sectors in that order, in any circumstance that might call for a proportionate distribution of the gas offered under the bidding process.

The onshore gas terminal in Gadimoga, Andhra Pradesh, owned by Reliance Industries Limited (RIL), has further announced plans to begin producing gas. Moreover, from Kakinada in Andhra Pradesh and Bharuch in Gujarat, the gas will be delivered to a 1,375 km long pipeline operated by an Indian gas pipeline company.

In the KG basin particularly, RIL and BP are working together to develop three major gas fields, including the MJ deepwater field in the final stage. Their MJ deepwater gas fields, which had marine system testing late last year, are scheduled to be commissioned this month. After commissioning the MJ fields, the consortium plans to increase the output from the KG-D6 block to about 30 million m3/d in the April 2023–March 2024 fiscal year.

Furthermore, only a portion of India's needs are covered by domestic supplies. As per the information in February, around 2.25 billion m3 of LNG were imported into the nation. Also, India used about 4.84 billion m3 of gas, up from 4.53 billion m3 in the previous month.

Related News

Enagás Pioneers Maritime Decarbonization, Quadruples LNG Supply in Two Years
  • 29-May-2024 3:08 PM
  • Journalist: Patricia Jose Perez
Equinor and Partners Secure Major Investment for Sustaining Gas Production at Troll
  • 28-May-2024 12:38 PM
  • Journalist: Patricia Jose Perez
Baker Hughes Secures Significant Deal for Gas Field Project in Algeria
  • 24-May-2024 12:09 PM
  • Journalist: Patrick Knight
MOL and JERA Ink Long-Term Charter Agreement for New LNG Carrier
  • 23-May-2024 12:30 PM
  • Journalist: Peter Schmidt