Reliance seeks $12.75 per unit for CBM gas, ONGC wants $9.35

PTI

New Delhi, February 13

Billionaire Mukesh Ambani’s Reliance Industries Ltd and state-owned Oil and Natural Gas Corporation (ONGC) are separately auctioning natural gas extracted from coal seams at prices linked to Brent crude oil price.

On the block

• Reliance has sought bids for sale of 0.65 million standard cubic meters per day from CBM block SP(West)-CBM-2001/1 for one year beginning April 1, 2023, the company’s tender document showed
• ONGC has offered 0.015 mmscmd of gas from North Karanpura (NK) block in Jharkhand for 3 years. It asked bidders to quote a premium ‘p’ as a percentage of Brent price

Reliance is seeking a minimum $12.75 per million British thermal unit for coal bed methane (CBM) from a block in Shahdol district of Madhya Pradesh, while ONGC wants $9.35 for the same kind of fuel from North Karanpura in Jharkhand, according to tender documents.

Reliance has sought bids for sale of 0.65 million standard cubic meters per day from CBM block SP(West)-CBM-2001/1 for one year beginning April 1, 2023, the company’s tender document showed.

It asked bidders to quote a variable ‘v’ as a percentage of dated Brent crude oil price.

Starting bid price has been kept as 15% of Brent (‘v’ = 15 per cent). At the current Brent price of $85 per barrel, this translates into a price of $12.75 per mmBtu. e-bidding will happen on February 24.

ONGC has offered 0.015 mmscmd of gas from North Karanpura (NK) block in Jharkhand for 3 years. It asked bidders to quote a premium ‘p’ as a percentage of Brent price.

The reserve or bid start price has been kept at 11 per cent of Dated Brent price ($9.35 per mmBtu at Brent oil price of USD 85 per barrel).

Price of gas “shall be higher of the reserve gas price plus quoted premium (p) or floor price plus quoted premium (p),” ONGC said.

The floor price will be USD 1 per mmBtu higher than the domestic gas price (which currently is USD 8.57 per mmBtu). The e-auction of ONGC gas will take place on March 2, it said.

CBM is an unconventional form of natural gas found in coal deposits or coal seams. Just like natural gas, it can be used to produce electricity.