RIL Wants Tripling of KG Basin Gas Price

Reliance Industries has sought tripling of its KG-D6 gas price from April 1, 2014 after the current below market rate of $4.205 per mmBtu expires.

The company has written to the Ministry of Petroleum and Natural Gas seeking to price its KG basin gas at a rate equivalent to the price India pays for importing liquefied natural gas (LNG), Business Standard reported.

The company wants to price KG-D6 gas at 12.67% of JCC, or Japan Customs-Cleared Crude, plus $0.26 per million British thermal unit. At $100 per barrel oil price, gas will cost $12.93 per mmBtu, sources have told the newspaper.

The formula proposed by RIL is the same at which Petronet LNG, the nation's largest liquefied natural gas importer, buys 7.5 million tonne per annum (30 million standard cubic meters per day) of LNG from RasGas of Qatar.

RasGas charges 12.67% of JCC and Petronet, pays a further $0.26 per mmBtu for shipping the gas in its liquid form (LNG) from Qatar.

RIL said it needs to "achieve financial closure in order to undertake further development activities in the block. Therefore, it has once again requested that approval of the Government to the price formula as proposed be conveyed to us without further delay."

The company said the price formula it has proposed would apply for all gas produced from KG-D6 block post March 2014.