Reliance Industries Ltd and its partner BP plc have re-launched an auction for the sale of natural gas from their eastern offshore KG-D6 block after incorporating the government’s new marketing rules to give CNG-selling city gas companies first priority over supplies.

Reliance and its partner BP Exploration (Alpha) Ltd(BPEAL) will sell 6 million standard cubic meters per day of gas in an e-auction planned for April 3, a tender notice said. The price is indexed to the global LNG marker, JKM but will be subject to the government-notified ceiling price.

The partners had originally planned the auction in January but days before that the ministry of petroleum and natural gas, on January13, published new rules for the sale and resale of gas produced from discoveries in the deep sea, ultra-deepwater and high-pressure-high temperature areas.

This led to the auction being suspended and is now being re-launched after incorporating changes.

Gas produced from wells drilled below the seabed is used to produce electricity, make fertiliser or turned into CNG for powering automobiles or piped to household kitchens for cooking as well as in industries.

The new government rules require bidders to state upfront if they were purchasing the gas through the auction for ‘own use as end consumers (including for use of their group entities) or as a trader.

Besides incorporating the changes in their tender, Reliance and BP have increased the duration of the supply contract to five years instead of three offered in January.

Supplies are to start from April 16, the tender said.