Date:14/03/2006 URL: http://www.thehindubusinessline.com/2006/03/14/stories/2006031404310100.htm

Back PMT partners to sell gas to GAIL for 2 more years

Our Bureau

The pact
The joint venture partners have agreed to sell 5.4 million standard cubic metres per day (mmscmd) of gas from the PMT fields to GAIL at $4.75 per million British thermal unit (mBtu).
Agreement between GAIL and the joint venture partners is likely to be signed in two-three days.

New Delhi , March 13

After tough negotiations, consensus finally seems to have emerged on the issue of supply of gas to GAIL (India) Ltd by the Panna-Mukta-Tapti (PMT) joint venture partners - ONGC, Reliance Industries, British Gas. The joint venture partners have agreed to sell gas to GAIL beyond March 31 for another two years, but at a higher price.

Industry sources told Business Line that the joint venture partners have agreed to sell 5.4 million standard cubic metres per day (mmscmd) of gas from the PMT fields to GAIL at $4.75 per million British thermal unit (mBtu).

Pact soon

An agreement between GAIL and the joint venture partners is likely to be signed in two-three days. The price at which the joint venture partners were selling gas from the fields to GAIL was $3.86 per mBtu.

At a meeting called by the Petroleum Secretary, Mr M.S. Srinivasan, here on Monday, the partners agreed to continue the supply of gas from the PMT fields to GAIL.

Sources said the joint venture partners expect to produce 10.2 mmscmd of gas from the PMT fields of which 4.8 mmscmd would be directly marketed by them and the remaining 5.4 mmscmd would be offered to GAIL.

Thus, ONGC-RIL-BG would continue selling gas from the fields to GAIL for two more years, beyond the expiry of the current contract on March 31.

The joint venture partners had recently approached the Petroleum Ministry for permission to sell the entire gas produced in the PMT fields directly to the customers at market price from April 2006.

The joint venture partners were till now selling about 5.8 mmscmd of gas to GAIL at a controlled price of $3.86 per mBtu.

They were marketing the remaining 4.8 mmscmd of gas from the fields at $4.08 per mBtu.

The Government had asked ONGC-BG-RIL to supply 6 mmscmd of gas from the fields to GAIL for one year from April 1, 2005 in the interest of the core sectors of power and fertiliser.