Bg Close To Resolving Panna Mukta Row

British oil and gas major, the BG Group, is close to resolving the Panna, Mukta and Tapti operatorship row with the Oil and Natural Gas Corporation (ONGC) and Reliance Industries Ltd.

"We have resolved all the outstanding issues and the signing of the agreement is a mere formality now," a BG official told Business Standard on the sidelines of the Petrotech 2003.

"The agreement could be signed as early as next week," he said without divulging the details of the agreement.

However, sources in ONGC indicated it could be a joint operatorship, where each of the three partners-- BG, ONGC and Reliance--would have equal powers to vet contracts.

BG, which had picked up Enron's 30 per cent stake in the three fields, has been having problems with ONGC, which owns a 40 per cent equity in the fields, and Reliance (30 per cent) over the operatorship issue. Earlier, Enron was the operator of the fields.

Meanwhile, BG India CEO Nigel Shaw said its liquefied natural gas (LNG) import terminal at Pipavav would not be viable if it was unable to secure the 3 million tonnes LNG supply contract of the National Thermal Power Corporation (NTPC).

He said the company needed a firm commitment on the consumption of LNG before investing in the terminal. "The NTPC contract will be the key to begin work on the proposed terminal at Pipavav," Shaw said.

BG proposes to set up a LNG import terminal at the all-weather port at Pipavav. The company has invested around $20 million in the terminal and the engineering and designing of the terminal have been completed.

But, according to Shaw, construction would not begin unless the supply contracts with industrial customers are tied up.