Norms relaxed for small, isolated gas fields in northeast

Rules for selling natural gas produced from small, isolated fields in northeast India have been further relaxed to extend the time stipulation for offtake by customers to one year from the date of readiness, an official statement said on Monday.

"The national oil companies (NOCs) have brought to the notice of the ministry that customers of northeast region are facing various difficulties in utilising the gas within 90 days and have been requesting for longer lead time for monetisation of gas from small and isolated fields," said a petroleum ministry release here said.

"Considering the difficulties of Northeast customers, the government has decided to increase the period of 90 days for off-take of gas from the date or readiness indicated by the NOCs to one year in respect of small and isolated fields located in the Northeast region," it added.

The petroleum ministry had in July 2013 permitted pricing freedom for gas produced from small, isolated fields and given marketing freedom by imposing no obligation of seeking customers only from the fertiliser and power sectors, with a stipulation, however, that only those customers who can take supply within 90 days be sold the gas.

The policy permits producers from such fields to sell gas at market rates by inviting competitive bids from prospective consumers.

The government has effected an 18-percent cut in domestic prices of natural gas, from $4.66 per unit to $3.82 per unit for six months starting October 1.

Natural gas prices in India are set by taking a volume-weighted annual average of that prevailing in the US, Britain, Canada and Russia. Prices are calculated on the trailing 12 month data with a lag of one quarter.