Coal News We love to talk!
Reliance Industries Ltd (RIL) today demanded freeing of natural gas pricing saying that the scarce fuel should be priced at the rates which consumers are willing to pay.
"The value of goods is determined by how much you are able to pay. It is not determined by how much I am going to sell at, B Ganguly, President and COO (Business), RIL said at the World Energy Policy Summit here.
RIL gets $4.2 per million British thermal unit for the gas produced from its KG-D6 fields in the Bay of Bengal. This rate is lower than $4.30 per mmBtu that Cairn India gets in the neighbouring Ravva Satellite field in the same basin and $5.73 per mmBtu price of UKs BG Group-operated Panna/Mukta and Tapti fields in western offshore.
The company has been pitching for a market determined price for KG-D6 gas after the current rates expire in March 31, 2014.
"Unless that freedom is there for the consumers to choose value, I dont think the market is integrated, he said pitching for freeing the market.
Ganguly who refused to be drawn into the pricing of KG-D6 gas, said "market should be free and integrated.
Cairn India CEO, P Elango said clarity on gas pricing was essential as the sector involves huge investment risks.
The State-owned gas utility GAIL India Chairman and Managing Director, B C Tripathi too agreed that pricing clarity was a must for upstream exploration and production sector as well as downstream consumers like power and fertiliser.
Recently, RIL in a memorandum of the Rangarajan Committee, which is examining terms of future contracts for exploration of oil and gas as well as basis for gas pricing, said only market related prices can provide an incentive to help produce the vast domestic resources that either concentrated in small pools or are located in technologically challenging ultra deep-sea.
"RIL and partner BP have around 5.5 trillion cubic feet of discovered gas resources which would require large amount of risk capital to be invested. Most of these discoveries would require price of more than $10 per mmBtu, it had said.
KG-D6 output has slipped drastically due to a host of problems and the company is arguing that restoring production would need higher investments.
- India, US push for $30 million energy storage research initiative Read more
- Rajasthan, Haryana, Chhattisgarh discoms major gainers under UDAY Read more
- Government may reject ONGCs call for premium pricing of KG field gas Read more
- Surana Solar bags Rs 15 crore order to provide solar modules for Aryavaan Renewable Read more
- Civic body blames EESL for poor streetlighting Read more
- JSW Energy inks MoU to set up power plant in Swaziland Read more
- China way ahead of India in renewable energy space Read more
- Power ministry cold to gas price hike suggestion Read more
- Cairn India, ONGC get 10-yr Barmer block extension beyond 2020 Read more
- OMCs stare at 37% rise in under-recovery Read more