Reliance resumes gas auction under new rules

Reliance resumes gas auction under new rules


According to the tender notice, Reliance and its partner BP Exploration (Alpha) Ltd. (BPEAL) will sell 60 lakh cubic meters per day of gas under the proposed auction scheme on April 3. Its price is linked to the global LNG marker, JKM (Japan Korea Marker).

New Delhi. Reliance Industries Ltd. and its partner BP Plc has resumed auctions for the sale of natural gas from its eastern offshore field KG-D6 block. Both companies have taken this step after the government included new marketing rules to give priority at the level of supply to gas distribution companies supplying CNG and piped cooking gas. According to the tender notice, Reliance and its partner BP Exploration (Alpha) Ltd. (BPEAL) will sell 60 lakh cubic meters of gas per day under the proposal on April 3. Its price is linked to the global LNG marker, JKM (Japan Korea Marker). But this will be subject to the ceiling price notified by the government.

The two partner companies initially planned to auction in January. But a few days before that, the Ministry of Petroleum and Natural Gas published new rules on January 13 for the sale and resale of gas produced from deep sea areas and high pressure-high temperature areas. Due to this, the auction was stopped and now it has been announced to start it again by incorporating the new rules. According to the new rules of the government, the bidders will have to tell in advance whether they will use the gas they are buying through auction as an end consumer themselves (including units of their group) or for business. The remaining gas will be allowed to be resold to the end consumers. On the other hand, the traders participating in the auction will be allowed to sell only under a maximum margin of Rs 200 per thousand cubic meters.

The ministry said, “If there is a need for proportionate distribution of the proposed gas under the bidding process, the contractor (gas selling company) will distribute the gas to bidders belonging to CNG (transport) / PNG (domestic cooking gas), fertilizers, LPG and power sectors.” Reliance and BP have decided to extend the supply contract from three years to five years after incorporating the changes in their tenders. In the previous tender, this period was three years. As per the tender, the supply will start from April 16. It states that priority will be given to gas distribution companies supplying CNG to vehicles and LPG through pipes.

Thereafter, preference will be given to fertilizers, power stations and other end users/traders. According to the document, the two companies have invited bids for the supply of 6 million cubic meters per day of gas, or one-third of the gas produced from KG-D6, starting April 16, 2023. JKM is the Northeast Asian spot price index for LNG delivery to Japan and Korea. The JKM price for May is around 13.5 per 1 million British Thermal Unit.

Disclaimer:IndiaTheNews has not edited this news. This news has been published from PTI-language feed.





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