Reliance Industries Ltd is seeking a minimum $10 rate for the gas it plans to produce from coal seams, as it altered its pricing formula to reflect the changed energy scenario.

Reliance has sought bids from users for 0.90 million standard cubic meters per day of gas it will produce from coal-bed methane (CBM) block SP (West)_CBM-2001/1 in Madhya Pradesh, according to a tender floated by the company.

Users have been asked to quote a premium they are willing to pay over and above 12.67 per cent of the Dated Brent crude oil price.

Gas price shall be higher than 12.67 per cent of Dated Brent plus premium ‘V’; or the government-declared monthly price for conventional gas. The government-mandated price for January is $7.82 per mmBtu.

Reliance has set the starting bid price of ‘V’ at $0.50 per million British thermal units — bidders have to quote ‘V’ higher than $0.50.

At the current Brent crude oil price of $78 per barrel, the minimum gas price comes to $10 per mmBtu (12.67 per cent of $78 is $9.88 per mmBtu. Added to this is a minimum premium of $0.50, which takes the gas price to about $10.4 per mmBtu).

E-auction is planned for January 31, the tender document showed. The contract duration is for 1 to 2 years beginning April 1.

The pricing Reliance is seeking is modified from the March 2022 auction. In that auction, it had sought bids at a premium over the base of 13.2 per cent of Brent crude oil price.

In March 2022, Reliance sold 0.65 mmscmd of CBM at a $8.28 per mmBtu premium over the prevailing Brent crude oil price.

Brent oil was trading above $115 per barrel at that time. It has now slipped to $78 a barrel.

Earlier this month, state-owned Oil and Natural Gas Corporation (ONGC) sought a premium over the government-dictated gas price of $7.82 per mmBtu for the gas it plans to produce from a CBM block in Jharkhand.

PTI