GAIL, ONGC to market Mumbai gas

NEW DELHI, Jan. 14 (UPI) -- State-run Gas Authority of India Ltd. and Oil and Natural Gas Corp. are planning to market gas from a Mumbai offshore field.

According to a GAIL official, the company, in collaboration with ONGC, is working out a commercial arrangement to market gas from ONGC's marginal field in Mumbai offshore. GAIL expects to get an additional 3 million to 4 million standard cubic meters per day of gas at a market-related price.

"Discussions are on with GAIL for marketing 3.2 mmscmd of gas from C-series field. The gas will be made available to GAIL at a market-related price," an ONGC official told Business Line newspaper Monday.

He said the market-related price is around $4.75 per million British thermal unit. The market price is at least 40-45 percent higher than the administered price, which the government fixes.

GAIL has been receiving 4.8 mmscmd of gas from Panna-Mukta-Tapti field, which it produces with Reliance Industries, ONGC and British Gas at $4.75 per mBtu. However, from the next financial year, GAIL will get the entire PMT output of 17 mmscmd at a higher price of $5.7 per mBtu.

"This gas from ONGC would help GAIL partially meet the deficit in demand and enhance the revenue of the company," said U.D. Choubey, GAIL chairman and managing director. Currently, India's gas demand is about 150 mmscmd to 160 mmscmd, while supply is about 96 mmscmd to 100 mmscmd.

The gas from C-series field, located 60 kilometers west of Daman in the Tapti Daman block of Mumbai offshore, will be available in October-November 2008, Choubey said.