ONGC invites fresh bids for direct sale of gas from Gamij

Changes in guidelines by Petroleum Ministry causes delay of one year in process

After facing the delay of almost a year for successful implementation of direct marketing of natural gas from the marginal gas fields in Gamij near Kheda, Oil and Natural Gas Corporation Ltd (ONGC) has once again invited fresh bids from the interested gas consumers for sale of 15,000 standard cubic meters per day (scmd) of gas.

On Tuesday, ONGC issued a tender notice inviting e-bids under single bid system from the gas consumers for sourcing gas available on fall-back (as and when available) basis. "The price of the gas under the bid is as per the non-APM (administered price mechanism) gas price issued by the Ministry of Petroleum and Natural Gas (MoPNG)," the tender notice issued by Ahmedabad Asset of ONGC read.

The company has put on offer 15,000 standard cubic meters per day (scmd) of gas from its Gamij gas field (GGS#3) for a period of five years.

Notably, the project, which was a pilot project for ONGC, was first taken up in July 2012 under the Ahmedabad Asset of ONGC, which had invited bids for the sale of 15,000 standard cubic meters per day (scmd) of gas as per non-APM gas price issued by MoPNG.

As many as 41 parties had bought the tender document and around 18 companies had submitted their bids while 14 of them could qualify for the bidding process, sources informed.

"The response was overwhelming. All top bidders were city gas distribution (CGD) players. But in November last year, the MoPNG ordered to put the process in abeyance," said a person involved in the bidding process.

Bidders included some of the CGD players such as Adani and state-run GSPC Gas.

"We were ready to lift the gas from the day-one of award of contract. We had also tied-up for evacuation infrastructure. Everything was in place, but suddenly the company put that project on hold," said an Adani Group official.

"ONGC had offered 15,000 scmd of non-APM gas, which is comparatively a small quantity for a CGD player, but in the time of high cost of gas, every small quantity counts. Therefore we had bid too," added an official of a public-sector CGD player.

According to industry insiders, MoPNG had found that a few of the bidders for Gamij gas did not hold the authorization from petroleum regulator, Petroleum and Natural Gas Regulatory Board (PNGRB) as CGD player. Hence, the project was put in abeyance.

However, it may be noted that in February this year, Rajahmundry Asset of ONGC started direct gas sale from its marginal fields under the guidelines of the MoPNG. ONGC started selling gas from Vygreswaram gas fields in East Godavari district with quantity of 10,000 scmd to the consumer.

"In February, the MoPNG came up with changed guidelines and revised criteria for bidders. And the process started once again," said a person close to the development. It may be noted that the delay in execution of the project cost heavily as gas flaring (releasing gas in open air) continued from the Gamij field for a year now.

The last date to submit fresh bids is July 12, 2013, while the submitted tenders will be opened on the same day. ONGC has also arranged a pre-bid conference on June 12, 2013.