RIL Pitches for Market Driven Gas Price

Pitching for market-driven prices for natural gas, Reliance Industries has said it has found very large gas reserves that need a price of more than $10 per million British thermal unit to be developed and produced.

Press Trust of India has reported that the in a 18-page submission to the C Rangarajan Committee, which is examining terms of future contracts for exploration of oil and gas as well as basis for gas pricing, RIL said only market related prices can provide an incentive to help produce the vast domestic resources that either concentrated in small pools or are located in technologically challenging ultra deepsea.

"RIL (and partner) BP have around 5.5 Trillion cubic feet of discovered gas resources which would require large amount of risk capital to be invested. Most of these discoveries would require price of more than $10 per million British thermal unit to be developed and produced," it said, PTI report said.

It currently gets paid $4.2 per mmBtu for the gas produced from its KG-D6 fields in Bay of Bengal. This rate is lower than what Cairn India gets in the neighbouring Ravva Satellite field in the same basin and UK's BG Group-operated Panna/Mukta and Tapti fields in western offshore.

KG-D6 output has slipped drastically due to a host of problems and the company is arguing that restoring production would need higher investments.