Gujarat govt company, GSPC, takes cue from Reliance Industries, seeks imported LNG price for KG basin gas
Gujarat State Petroleum Corp Ltd (GSPC) wants to price gas that it will produce from Deen Dayal West (DDW) gas field in block KG-OSN-2001/3 by third quarter of 2013, at a minimum of USD 8.50 per million British thermal unit, excluding local taxes and margin.
GSPC, owned by the Gujarat government, will produce a maximum of 5.24 million standard cubic meters per day of gas from the offshore DDW gas field. The gas will land at Mallavaram, near Kakinada in Andhra Pradesh, and can be ferried to customers up to Gujarat through Reliance Gas Transportation Infrastructure Ltd's East-West pipeline.
The company in an advertisement issued in national and regional dailies invited bids from potential consumers at price formula at which Petronet LNG gets liquefied natural gas (LNG) from Qatar on a long-term contract.
GSPC sought 12.67 per cent of the average Brent crude oil price plus USD 0.26 per million British thermal unit. It asked users to quote a positive or negative number, termed as 'V', that can be added to this pricing formula.
"Brent crude oil price will be capped at USD 110 per barrel and floor of the Brent crude oil price will be USD 65," it said in the advertisement.
Considering 'zero' as the value of the quotable component 'V', the DDW gas will cost about USD 14.2 per mmBtu