The exploration major began production from C-Series fields last month and is currently producing between 0.8 and 1.2 mmscmd from 6-7 wells drilled to date. Peak output of 2.8 mmscmd will be reached once all the 15 wells are drilled
The government has approved $5.25 per million British thermal unit (mmBtu) as the price of gas produced from Oil and Natural Gas Corporation’s (ONGC) C-Series fields in Mumbai offshore, reports PTI.
State-owned ONGC had initially sought $5.5 per mmBtu but the oil ministry last month approved a price of $5.25 per mmBtu, a senior ministry official said.
Natural gas produced from C-Series fields is sold to GAIL, which further markets it to end users.
ONGC began production from C-Series fields last month and is currently producing between 0.8 and 1.2 million standard cubic meters per day (mmscmd) from 6-7 wells drilled to date. Peak output of 2.8 mmscmd will be reached once all the 15 wells are drilled, which may happen post-monsoon.
The official said the price approved for C-Series field is about a dollar more than the price at which Reliance Industries (RIL) sells gas from the nation's biggest gas field in Krishna Godavari (KG) basin off the east coast.
Reliance gets $4.215 per mmBtu for the gas it produces from KG-D6 fields off the Andhra coast. The price is fixed for the first five years of production—till March 2014.
KG-D6 gas production began on 2nd April and is slated to rise to 80 mmscmd by year-end, nearly doubling the nation's gas output.
The official said according to the production profile given by ONGC, the peak output of 2.8 mmscmd from C-series will last 5-6 years.
The price for C-series fields is lower than what GAIL pays for gas from the western offshore Panna/Mukta and Tapti or PMT, fields that are jointly owned by British Gas, RIL and ONGC.
GAIL pays $5.7 per mmBtu for PMT gas, compared to $4.3 per mmBtu for Cairn India-operated Ravva field off the east coast.
None of the prices, include transmission charges, marketing margins or local levies on gas sales.
ONGC sells a large chunk of its gas at the government controlled price, which was recently revised to $4.2 per mmBtu.
The company has invested Rs3,195 crore to develop the C-Series marginal field that is estimated to hold in-place reserves of 15.54 billion cubic metres of gas and 4.46 million cubic metres of condensate.
The C-Series fields were discovered in 1990s and are about 60 km west of Daman in the Tapti-Daman block offshore Mumbai at water depths ranging from 19 metres to 35 metres, but considered marginal at the pre-revised price of $1.79 per mmBtu that ONGC got for most of its gas.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
