ONGC Plans to Ramp Up Gas Output

Oil and Natural Gas Corp (ONGC) plans to raise natural gas production by over 7.22 million standard cubic metres per day (mmscmd) in next two years to meet the growing energy deficit in the country.

The incremental output in 2012-13 would be 1.45 mmscmd and a substantial 5.77 mmscmd would come in 2013-14, official sources told Press Trust of India. ONGC currently produces about 55 mmscmd of gas.

ONGC has signed an agreement to give all the incremental production to state-run gas utility GAIL India  which will sell it to consumers at government approved rates, PTI report said. GAIL holds exclusive marketing right of all gas produced by ONGC for a three-year period, which can be extended on mutual consent, the report said citing same sources.

The company will get $ 5.25 per million British thermal unit (mmBtu) price for the gas it produces for new fields in nominated blocks in the western offshore and $ 4.75 per mmBtu for fields in Krishna Godavari basin. 

The price is more than $ 3.818 per mmBtu that the government had set for the gas ONGC produces from its operational fields in the blocks given to it on nomination basis.

The price for consumers of this gas, known as APM or government administered gas, after including royalty is $ 4.2 per mmBtu, sources said.