3 mscmd D6 gas may be swapped with ONGC's C-series gas

The empowered group of ministers (EGoM) on the Krishna-Godavari (KG) basin, scheduled to meet tomorrow, may consider swapping the supply of 3 million standard cubic metres a day (mscmd) KG gas to customers in the Uran region (Gujarat) with ONGC’s C-series gas.

The group, headed by Finance Minister Pranab Mukherjee, is meeting for the first time after the Supreme Court gave its verdict on the gas dispute between the Ambani brothers.

“The government has fixed the price of C-series gas at $5.25 per million British thermal units (mBtu) till March 2014. The price of Reliance Industries’ KG D6 gas is also fixed till the same period at $4.2 per mBtu. However, due to the proximity of C-series (in Mumbai offshore) to Uran, the delivered price of C-series gas would be cheaper to D6 gas,” said a government official.

ONGC, which began production from the C-Series fields last month, is producing between 0.8 to 1.2 mscmd. The production is expected to rise to 3 mscmd. Consumers in the Uran region, primarily from the power and fertiliser sector, are getting 7.86 mscmd D6 gas.

The EGoM may also consider facilitating termination of existing regassified-liquefied natural gas contracts of urea plants so that it can be substituted with cheaper D6 gas to bring down the government’s fertiliser subsidy.