BP Says $8-8.5 per mmBtu Gas Price in India Not Enough

British energy firm BP has said that the Rangarajan Committee’s recommendation of doubling India’s domestic natural gas price to $8-8.5 per mmBtu will be inadequate for bringing high-risk deep sea discoveries to production.

Press Trust of India has reported that BP, in a letter to Principal Secretary to the Prime Minister of India, has asked the government to spell out a clear roadmap for migrating to market determined gas pricing in the next 3-5 years so as to provide clarity to producers to make investment decisions.

“The price determined through the Committee’s recommended formula is at a 40-50 per cent discount to the existing free market price of imported LNG into India,” BP India head Sashi Mukundan wrote in the March 8 letter.

“New production will come only from existing producing fields” but “technically challenged resources and projects in deep water and high risk exploration will be uneconomical to develop and produce,” PTI quoted from the letter.