Vedanta seeks bids for $19 for gas from Gujarat

Vedanta Ltd seeks a minimum $19 price for natural gas produced from a field off Gujarat. The company looks to cash in on the recent surge in global energy prices. It has called for bids for the sale of 0.25 million standard cubic meters per day of gas produced from CB/OS-2 block located in Suvali, Surat district of Gujarat.

The company has sought bids based on the average monthly price of Brent crude oil and Platts’ West India Marker (WIM) for liquefied natural gas (LNG) shipments.The sale price will be lower of Platts LNG WIM + 1.0 or a premium over 16.67 per cent average Brent crude oil price, the tender document said.

At the current trading price of $117.68 per barrel for Brent crude oil, the floor price comes to $19.6 per million British thermal units. To this, buyers will have to bid a premium. Platts WIM closed at $32.275 per mmBtu on March 21 and if this benchmark is considered, the selling price will be $33.275.

“The sales gas price on a monthly basis shall be calculated as lower of Platts LNG WIM + 1.0 (or) 16.67 per cent of Average Brent Price + P,” it said adding ‘P’ shall be quoted by bidders in USD per mmBtu. The floor price will however be not lower than the government-administered price for gas, which currently is $2.9 per mmBtu.