After implementing the government's new marketing regulations to give CNG-selling city gas companies first priority over supplies, Reliance Industries Ltd (RIL) and its partner BP plc relaunched an auction for the sale of natural gas from their eastern offshore KG-D6 block. According to a tender notice, Reliance and its partner BP Exploration (Alpha) Ltd (BPEAL) will sell 6 million standard cubic metres of gas per day through an online auction on April 3.
The price is indexed to the global LNG marker, JKM but will be subject to the government-notified ceiling price. The partners had originally planned the auction in January but days before that the Ministry of Petroleum and Natural Gas, on January 13, published new rules for the sale and resale of gas produced from discoveries in deep sea, ultra-deep water and highpressure-high temperature areas.
The new government rules require bidders to state upfront if they were purchasing the gas through the auction for 'own use as end consumers or as a trader. While end consumers were allowed to resale any unconsumed gas, traders participating in the auction were allowed to resell subject to a maximum trading margin of Rs 200 per thousand cubic meters.
This led to the auction being suspended and is now being relaunched after incorporating changes. Gas produced from wells drilled below seabed is used to produce electricity, make fertiliser or turned into CNG for powering automobiles or piped to household kitchens for cooking as well as in industries.
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