GAIL to buy coal-bed methane gas from Essar in West Bengal at $8 per unit

State-run GAIL (India) has won a contract for buying coal-bed methane (CBM) gas produced from Essar Oil’s Raniganj block in West Bengal. The gas will be supplied based on the three-month daily average price of Brent crude oil, which works out to around $8 per million British thermal unit (mBtU) now.

Based on current prices, the 15-year contract will be around Rs 7 billion on an annual basis. 

This comes a few months after Reliance Industries (RIL), which began commercial production of CBM from its two blocks in Madhya Pradesh,  started buying CBM at around $7.8 mBtu. 

Essar’s price is