The Hindu Business Line : GAIL to continue selling gas from PMT fields

The Government has allowed GAIL (India) Ltd to continue selling gas from Panna-Mukta-Tapti (PMT) fields for two more years but will have to pay joint venture partners - ONGC, Reliance Industries, British Gas - a higher price.

At a recently convened meeting of the Petroleum Secretary, Mr M.S. Srinivasan, the consortium partners agreed to continue selling 6 million standard cubic meters per day (MSCMD) of gas from the fields to GAIL till March 31, 2008 but it is likely to charge $4.60 per million British thermal unit (mBtu).

Currently, GAIL pays $3.86 per mBtu to the joint venture partners. Talking to newspersons, the ONGC Chairman, Mr Subir Raha, said that the consortium was of the view that it did not need a marketing intermediary to sell gas.

"The Government changed the nominee for buying 10.8 MSCMD of gas from the fields last year when it permitted the consortium to market gas.

"And it was on an interim arrangement basis that GAIL was allowed to sell 6 MSCMD of gas from the field to power and fertiliser sectors for one year, which ends on March 31, 2006.

"GAIL was no longer the Government nominee as the consortium was given the right to sell 4.8 MSCMD of gas at market price," he said.

Besides, some of the consortium partners such as Reliance wanted to use their share of gas from the field for their own consumption and so they had requested the Government freedom to sell all the gas from fields, he said.

At the meeting convened by the Petroleum Secretary, GAIL had agreed to pay a price as indicated in the production sharing contract for the fields.

As per the formula, GAIL would have had to pay $5.73 per mBtu. Mr Srinivasan, however, said that GAIL would pay a price equivalent to the best quote the consortium was getting from selling 4.8 MSCMD of gas.

The joint venture partners have been asking the Petroleum Ministry for permission to sell 6 MSCMD of gas from the PMT fields currently being supplied to GAIL, directly to customers at market price from April 2006.

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