Removing a leaf from Reliance Industries Ltd’s playbook, state-claimed Oil and Natural Gas Corporation (ONGC) is framing another auxiliary for gas business that could be utilized to offer and purchase gas from the company’s own fields.
The leading body of ONGC at its gathering on February 13 affirmed production of another completely possessed auxiliary organization for gas and condensed flammable gas (LNG) business esteem tie subject to important endorsements, as per the company’s second from last quarter profit declaration.
“The organization is being framed with the goal of sourcing, showcasing and exchanging of gaseous petrol, LNG business, Hydrogen improved CNG (HCNG), gas to control business, bio-energy/bio-gas/bio methane/other biofuels business, and so forth,” it said.
ONGC may utilize the new auxiliary to purchase any new gas that the firm creates from fields, for example, KG-D5 in the Krishna Godavari bowl, individuals with direct information on the matter said.
The public authority had in October 2020 permitted members of gas makers to purchase the fuel in open sale.
This arrangement change permitted Reliance to purchase 66% out of the extra 7.5 million standard cubic meters each day of gas it alongside accomplice BP plc of UK intends to create this year from the new fields in KG-D6 block.
“ONGC also can take a gander at this alternative at this point. The new auxiliary can take an interest in any sale that ONGC will accomplish for gradual gas from KG-D5 block,” a source said.
Other than guaranteeing rivalry and reasonable value disclosure, the ONGC auxiliary would then be able to sell the gas so sourced to firms, for example, Mangalore Refinery and Petrochemicals Ltd (MRPL) at an edge.
This would assist ONGC with procuring edges on the gas delivered.
“At the present time gas is a misfortune making business for ONGC. The public authority controls gas value which is not as much as cost of creation,” the source said.
The public authority has fixed a cost of USD 1.79 per million British warm unit for ONGC’s fields. This is half of the expense of creation.
It permits a higher pace of USD 4.06 per mmBtu for troublesome fields, for example, deepsea fields (KG-D6 and KG-D6) however even that is not exactly the expense of creation from profoundly capital escalated projects.
The current guideline implies regardless of whether Reliance found a value likeness USD 6-7 for each mmBtu for the 7.5 mmscmd of new gas from KG-D6, it would get just USD 4.06 till March 31.
The equivalent would apply for ONGC. It may find a rate higher for the 15 mmscmd steady gas arranged from KG-D5 block yet it can get just USD 4.06 according to current cost.
“Along these lines, basically the ONGC’s gas auxiliary can offer and purchase KG-D5 gas. It will pay ONGC USD 4.06 per mmBtu yet can offer to MRPL or some other client at a cost higher than that, guaranteeing that the gas business turns into a reasonable suggestion,” the source said.
The public authority has given administrators the opportunity to find market costs however this rate is dependent upon an estimating roof or cap that the public authority tells at regular intervals. The cap for a half year to March 31, 2021 is USD 4.06 per mmBtu.
In the February 5 closeout, Reliance O2C Limited, an associate of Reliance Industries Ltd, selected up 4.8 mmscmd from the 7.5 mmscmd gas sold.
State gas utility GAIL (India) Ltd won 0.85 mmscmd of provisions while Shell got 0.7 mmscmd.
Adani Total Gas Ltd got 0.1 mmscmd, Hindustan Petroleum Corporation Ltd (HPCL) 0.2 mmscmd and Torrest Gas 0.02 mmscmd. Different purchasers included IRM Energy (0.1 mmscmd), PIL (0.35 mmscmd) and IGS (0.35 mmscmd), they said.
Sources said the gas was purchased at a cost of USD 0.18 per million British warm unit markdown to JKM (Japan/Korea melted flammable gas import value), that is cost of JKM (short) USD 0.18 with residencies going from 3 to 5 years.
Dependence O2C is the new unit that holds the company’s treatment facility and petrochemical resources.
Prior in November 2019, 5 mmscmd of petroleum gas was sold at a cost in the scope of around 8.6 percent of Brent unrefined petroleum for residency going from 2 to 6 years. That gas went to purchasers like Essar Steel, Adani Group and state-claimed GAIL.
Dependence BP began creation of gas on December 18 a year ago from the R Cluster super profound water gas field in square KG-D6 off the east shoreline of India.
The pair are creating three profound water gas projects in square KG-D6 – R Cluster, Satellites Cluster and MJ – which together are relied upon to meet around 15 percent of India’s gas interest by 2023.
ONGC is building up a bunch of disclosures in the KG-D5 block which sits close to Reliance’s D6 region.
