ONGC sells KG basin field’s gas

Oil and Natural Gas Corporation (ONGC) has sold initial gas it is producing from its KG basin fields in the Bay of Bengal to three firms, including Torrent Gas.

In an e-auction, the firm sold 1.4 million standard cubic meters per day – a fraction of the planned output from the block that sits next to Reliance Industries’ prolific KG-D6 area in the Bay of Bengal, to Torrent Gas Pune Ltd, GAIL (India) Ltd and Hindustan Petroleum Corporation Ltd (HPCL).

GAIL picked up 0.8 mmscmd while HPCL took 0.42 mmscmd and Torrent 0.12 mmscmd.

The company had sought bids from users like city gas operators that sell CNG to automobiles and pipe cooking gas to households, companies using gas to produce fertiliser or make electricity, LPG producers and traders, for the gas from its KG-DWN-98/2 or KG-D5 block.

ONGC asked companies to quote a premium ‘P’ that they are willing to pay over and above the rate arrived at by calculating 14 per cent prevailing Brent oil price plus USD 1 per million British thermal unit.

At current Brent crude oil price of USD 74 per barrel, the base price comes to USD 11.3 per mmBtu (USD 10.36 per mmBtu at 14 per cent of Brent oil price plus a mark-up of USD 1).