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Ministry not to intervene in GAIL-ONGC gas deal

Richa Mishra

New Delhi , Oct 3

THE Petroleum Ministry has said that GAIL (India) Ltd should take up the issue of commercial arrangement with Oil and Natural Gas Corporation (ONGC) for buying natural gas from the latter's marginal fields off the west coast on its own.

A senior Ministry official said that GAIL has been asked to raise the issue with ONGC directly, as this was a deal between the two commercial entities.

GAIL had approached the Ministry after ONGC did not respond to its request for information on unit cost of gas from the marginal fields of C-22 and C-24.

ONGC has marginal gas fields of C-22, C-24, C-39, C-23, C-26, B-12 and North Tapti (C-1), which is to be sequentially exploited for sustained gas production. It is estimated that these fields will give between 1.5- 2.5 million standard cubic metres of gas per day (mscmd) for 14 years.

According to sources, GAIL was to purchase gas from these fields. For this purpose, it proposed to examine the feasibility of taking gas through its planned Dahej-Uran pipeline.

However, as the fields were not cost effective, it was decided that ONGC would be allowed to sell gas at market rates, sources added.

GAIL had sought details of technical issues and the unit cost of gas at the landfall point inclusive of offshore transportation charges, GAIL sources said adding that the request was made about a year back.

While GAIL was pushing for early monetisation of gas from the fields, there were reports that ONGC was in talks with private companies to sell gas, sources said.

The Gas Linkage Committee had taken a decision in its meeting on November 22, 2002 that the utilisation plan of gas from C-22/C-24 fields was to be jointly decided by the Ministry, ONGC, OIL and GAIL.

Subsequently, in a meeting taken by the Ministry in August last year, ONGC offered the gas from C-22/24 fields to GAIL on same terms as Panna Mukta Tapti gas, a GAIL executive said.

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