RIL, ONGC to make presentation on gas pricing
Reliance Industries and Oil and Natural Gas Corp to present view on gas pricing to panel of government officials.
By PTI |
NEW DELHI: Reliance Industries and Oil and Natural Gas Corp (ONGC) will on Tuesday present their views as producers on pricing of natural gas to a panel of top government officials formed to resolve the vexed issue.
RIL, which is to begin natural gas production from its prolific KG-D6 block off the east coast from July 2008, and ONGC, which has also discovered substantial gas reserves in eastern offshore, would make separate presentations to the Committee of Secretaries (CoS), official sources said.
The CoS, comprising secretaries of petroleum, power, fertilizer, expenditure and law, would in the morning hear consumers' perspective on natural gas pricing when fertilizer ministry would make a presentation and in the afternoon discuss the issue with gas producers.
Power Ministry had on July 6 made a presentation to the CoS demanding gas at affordable prices for power plants to keep electricity generation cost low. Fertilizer Ministry was also scheduled to make presentation that day but could not, due to paucity of time.
Sources said Power Ministry demanded regulating pricing of natural gas to be produced by Reliance from KG-D6 and said the current administered price of Rs 3.2 per cubic meters (1.8 dollars per million British thermal unit) for ONGC gas was the ideal price for power generation.
On RIL's proposed pricing formula for KG gas, it said gas price or formulae was "market-distorted, not true market- discovered" as price bids were called from buyers picked by RIL. The delivered price of gas of around 6 dollars per mBtu at power plant would make power generation unsustainable, power ministry had said.
The Power Ministry said while administered gas price led to generation cost of Rs 1.66 per unit, RIL's gas price would lead to an electricity generation cost of Rs 2.52 per unit.
The sources said it also called for an independent audit of the cost produced by RIL in developing the KG-D6 fields and demanded that the government take its share from the field in kind and allocate the same to power and fertilizer sectors at affordable prices.
Power Ministry also demanded government ensure that state-run utility NTPC's rights under a contract with RIL were not jeopardised in any manner.
RIL had committed to supply gas to NTPC's Kawas and Gandhar plants in Gujarat at a delivered price of 3.18 dollars per mBtu but the matter is now in court after the gas producer disputed certain clauses in the contract.
Government should frame necessary policy so that gas suppliers do not resort to undue profiteering, the power ministry had said.
RIL, which is to begin natural gas production from its prolific KG-D6 block off the east coast from July 2008, and ONGC, which has also discovered substantial gas reserves in eastern offshore, would make separate presentations to the Committee of Secretaries (CoS), official sources said.
The CoS, comprising secretaries of petroleum, power, fertilizer, expenditure and law, would in the morning hear consumers' perspective on natural gas pricing when fertilizer ministry would make a presentation and in the afternoon discuss the issue with gas producers.
Power Ministry had on July 6 made a presentation to the CoS demanding gas at affordable prices for power plants to keep electricity generation cost low. Fertilizer Ministry was also scheduled to make presentation that day but could not, due to paucity of time.
Sources said Power Ministry demanded regulating pricing of natural gas to be produced by Reliance from KG-D6 and said the current administered price of Rs 3.2 per cubic meters (1.8 dollars per million British thermal unit) for ONGC gas was the ideal price for power generation.
On RIL's proposed pricing formula for KG gas, it said gas price or formulae was "market-distorted, not true market- discovered" as price bids were called from buyers picked by RIL. The delivered price of gas of around 6 dollars per mBtu at power plant would make power generation unsustainable, power ministry had said.
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The Power Ministry said while administered gas price led to generation cost of Rs 1.66 per unit, RIL's gas price would lead to an electricity generation cost of Rs 2.52 per unit.
The sources said it also called for an independent audit of the cost produced by RIL in developing the KG-D6 fields and demanded that the government take its share from the field in kind and allocate the same to power and fertilizer sectors at affordable prices.
Power Ministry also demanded government ensure that state-run utility NTPC's rights under a contract with RIL were not jeopardised in any manner.
RIL had committed to supply gas to NTPC's Kawas and Gandhar plants in Gujarat at a delivered price of 3.18 dollars per mBtu but the matter is now in court after the gas producer disputed certain clauses in the contract.
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Government should frame necessary policy so that gas suppliers do not resort to undue profiteering, the power ministry had said.
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