Oil and Natural Gas Corporation (ONGC) has called on buyers to bid for natural gas from the deepwater fields of the KG-DWN 98/2 block off the east coast. ONGC is set to supply about 2 million metric standard cubic metres per day (MMSCMD) of natural gas from the fields starting June-end.
The ramping up of production from the KG-DWN 98/2 block by ONGC is a key component of the government’s plan to boost domestic production, with the block expected to reach peak production of 15 MMSCMD by 2024. This would account for an about 20 per cent increase above the company’s current production level of about 70 MMSCMD. Natural gas output from the Krishna Godavari (KG) basin is a key part of India’s plans to cut import dependence by boosting domestic production.
Offer for sale
ONGC has invited offers for the sale of natural gas from the block for three to five-year terms with the gas to be delivered at Odalarevu onshore terminal in Andhra Pradesh. Potential buyers will be required to quote a price indexed to Brent crude price. However, the price payable by buyers will be capped at $3.62 per million metric British thermal units (MMBTu) for the six month period starting April.
The Centre had, in March, kept the domestically produced natural gas at $1.79 per MMBTu and reduced the ceiling price of natural gas from deepwater and ultra-deepwater fields to $3.62 from $4.06 per MMBTu for the April-September period.