Monday, January 14, 2008

GAIL, ONGC teaming up for Mumbai offshore gas

Source: Thehindubusinessline

GAIL (India) Ltd and ONGC are working out a commercial arrangement to market gas from the latter’s marginal field in Mumbai offshore. GAIL expects to get an additional 3-4 million standard cubic metre per day (mmscmd) of gas at a market-related price.

A senior ONGC official told Business Line, “Discussions are on with GAIL for marketing 3.2 mmscmd of gas from C-series field. The gas will be made available to GAIL at a market-related price.”

The market price normally depends on demand, industry sources said, adding that at present the market-related price was around $4.75 per mBtu. The market price is at least 40-45 per cent higher than the administered price decided by the Government.

Since 2006-07, GAIL has been getting 4.8 mmscmd of gas from Panna-Mukta-Tapti field — produced by the joint venture between Reliance Industries Ltd, ONGC and BG — at $4.75 per mBtu. However, from the next financial year, GAIL will get the entire PMT output of 17 mmscmd at a higher price ($5.7 per mBtu).

“This gas from ONGC would help GAIL partially meet the deficit in demand and enhance the revenue of GAIL,” Mr U.D. Choubey, GAIL Chairman and Managing Director, said. At present, gas demand in the country is about 150-160 mmscmd, while supply is about 96-100 mmscmd. The gas from C-series field, located 60 km west of Daman in the Tapti Daman block of Mumbai offshore, will be available post-monsoon (October-November) this year.

The fields are estimated to hold in-place reserves of 15.54 billion cubic metre of gas and 4.46 mcm of condensate. The development of the first phase is expected to be completed by December 2008. The estimated gas production from the field is more than 3 mmscmd.