ONGC to sell C-Series gas at $5.5 per mBtu

State-run Oil and Natural Gas Corporation Ltd (ONGC) will sell gas from its C-Series field at $5.5 per million British thermal unit (mBtu), a 30 per cent premium over the rate at which Reliance Industries Ltd (RIL) sells gas produced from its KG-D6 gas block.

RIL sells at $4.2 per mBtu and the price is fixed for the first five years of production.

ONGC would begin production from C-Series field in less than a month, said a company official. “In about two-three weeks, we would begin supply to GAIL India who would market the gas. The field would begin with 0.8 million standard cubic metre a day (mscmd) output that would rise to around 3 mscmd in a year,” said an ONGC executive.

C-series (eight wells) is a marginal field, located 60 km west of Daman in the Tapti Daman block of Mumbai offshore. ONGC invested over Rs 3,195 crore for its development.

The C-series field is estimated to hold in-place reserves of 15.54 billion cubic metres of gas and 4.46 million cubic metres of condensate. The field, discovered in the 1990s, has a peak output of 3 mscmd, expected to last five-six years.

ONGC gets market price for gas from Ravva Satellite ($4.3 per mBtu that is being reviewed) and from Panna-Mukta-Tapti ($5.65/mBtu and $5.73/mBtu) joint venture fields. ONGC sells a major portion of its natural gas produced from other fields at government-controlled price of about $1.8 per mBtu, mainly to the power and fertiliser sectors.

ONGC has maintained that the C-series field in Mumbai offshore is viable only at a market-related price. “The field was given to ONGC prior to the New Exploration Licensing Policy regime, and thus does not fall into the administered price regime,” an ONGC official said.

The price for C-series fields is similar to what GAIL pays for gas from the western offshore Panna-Mukta and Tapti (PMT) fields that are jointly owned by British Gas, Reliance and ONGC.