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Mumbai:
Reliance Industries has fixed the cost of natural gas from its Krishan Godavari
basin field between $4.4 and $4.6 per million British thermal unit, and expects
the government to approve the price by next month. The
RIL gas-pricing formula is linked to the price of Brent crude, with a floor of
$25 and a cap of $65 per barrel. The gas price, based on quotes received from
the main consumers like power and fertiliser companies, has been forwarded to
the petroleum ministry for approval, sources said. The
delivered price of gas at the maximum will come to around $6.8 per mBtu in Maharashtra/Gujarat
after adding the transportation cost, marketing margin and 4 per cent central
sales tax, sources said, adding, the price will be calculated on a year''s average
price of Brent crude with forward contracts of up to three years. RIL
CEO (oil and gas) P M S Prasad made a presentation on gas formula to the petroleum
secretary M S Srinivasan before an interaction with key consumers. RIL,
he said, was on schedule to produce first gas from the KG-D6 block in July 2008,
beginning with an initial output of 32-40 million standard cubic meters per day
(mmscmd). With peak output of 80 mmscmd targeted before 2009. government
on gas pricing. The bidding process was also in line with the ones followed by
ONGC, British Gas and RIL consortium for the Panna, Mukta Tapti fields. The pricing
method has been commended by experts and the regulator as transparent and is expected
to receive approval from the government.
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