Reliance Industries Ltd and state-owned Oil and Natural Gas Corporation (ONGC) are separately auctioning natural gas extracted from coal seams at prices linked to Brent crude oil price.
Reliance is seeking a minimum $12.75 per million British thermal units for coal bed methane (CBM) from a block in the Shahdol district of Madhya Pradesh, while ONGC wants $9.35 for the same kind of fuel from North Karanpura in Jharkhand, according to tender documents.
Reliance has sought bids for the sale of 0.65 million standard cubic meters per day from CBM block SP(West)- CBM-2001/1 for one year beginning April 1, the company’s tender document showed.
It asked bidders to quote a variable ‘v’ as a percentage of dated Brent crude oil price.
Starting bid price has been kept as 15 per cent of Brent (‘v’ = 15 per cent). The current Brent price of $85 per barrel translates into a price of $12.75 per mmBtu. e-bidding will happen on February 24.
ONGC has offered 0.015 mmscmd of gas from North Karanpura (NK) block in Jharkhand for three years. It asked bidders to quote a premium ‘p’ as a percentage of the Brent price.
The reserve or bid start price has been kept at 11 per cent of dated Brent price ($9.35 per mmBtu at Brent oil price of $85 per barrel).
Price of gas “shall be higher of the reserve gas price plus quoted premium (p) or floor price plus quoted premium (p),” ONGC said.
The floor price will be $1 per mmBtu higher than the domestic gas price (which currently is $8.57 per mmBtu). The e-auction of ONGC gas will take place on March 2.
