State-owned Oil and Natural Gas Corp (ONGC) has sold natural gas from three coal-bed methane (CBM) blocks in Jharkhand for a price ranging between USD 5.77 per million British thermal unit to USD 6.12 per MMBtu.
ONGC sold gas from its Bokaro CBM block to a private industry, H N Roy, for U SD 5.77 per MMBtu on a gross calorific value basis, sources with direct knowledge of the development said. ONGC is to start production from the three blocks by next month with the peak volumes touching 3 million standard cubic meters per day.
State gas utility GAIL will buy gas found below coal-seems in the North Karanpura block at USD 5.56 per MMBtu while private sector Positron Energy Pvt Ltd would offtake gas from Jharia CBM block at USD 6.12 per MMBtu. Sources said the company has already drilled six wells on Bokaro block and the 7th well was in progress. A total of 30 wells are planned to be drilled during 2018-19.
The price realised by ONGC is less than the rate at which Essar Oil has sold its entire production of coal-seam gas or CBM from a West Bengal block to state-owned GAIL India Ltd.
GAIL in February bought 2.3 million standard cubic metres per day of CBM that Essar Oil and Gas Exploration and Production (EOGEPL) will produce from its Raniganj block in West Bengal for USD 7.1 per MMBtu.
The rate is more than double of the USD 3.06 per MMBtu price set by the government for most of the domestically produced conventional natural gas.
Essar had used the same formula which Reliance Industries had first used in 2012 to seek bids for its CBM gas from its Sohgpur block in Madhya Pradesh, and then again last year for selling the CBM. In the first instance, the oil ministry had not approved the price.
RIL's Sohagpur gas at today's oil price comes to USD 7.15 per MMBtu on GCV basis.
The formula used by RIL and Essar is the same at which Petronet LNG, a joint venture of public oil companies, whose chairman is the oil secretary, used to import long-term liquefied natural gas (LNG) from Qatar.