Reliance has so far made 19 gas discoveries in the KG-D6 block. (File)New Delhi: Reliance Industries Ltd and its partner bp plc of the UK have sought bids for the sale of natural gas from the eastern offshore KG-D6 block at a price linked to the rate at which LNG (liquefied natural gas) is delivered to Japan and Korea.The two partners invited bids for the sale of 6 million standard cubic meters per day of gas starting February 2023, according to the tender document.Users such as city gas operators that convert gas into CNG (compressed natural gas) for sale to automobiles and pipe it to household kitchens for cooking purposes, or power plants that use it to generate electricity or fertilizer units that use it to make urea, have been asked to quote premium they are willing to pay over the JKM price.JKM is the Northeast Asian spot price index for LNG delivered ex-ship to Japan and Korea. JKM price for February is USD 28.83 per million British thermal unit.Bidders have been asked to quote variable ‘V’ in the gas price formula ‘JKM V’.The starting bid for ‘V’ has been set at $(minus) 0.30 per mmBtu. “Each Bidder is required to enter bids that are higher than or equal to the starting” bid quote, the tender document said.The maximum valid bid for ‘V’ shall be $5.01 per mmBtu beyond which the bid shall not be accepted by the e-bidding portal, it said.The gas price, it said, shall be higher of the government-set ceiling price for gas produced from deepsea fields or the lower of price arrived at the bidding and the ceiling price.In May last year, Reliance-pb had auctioned 5.5 mmscmd of incremental gas from the newer discoveries in the KG-D6 block, benchmarking it to the same JKM gas marker.Three-fourths of that volume was picked-up by Reliance and its affiliates.The price discovered in that e-auction came at a USD 0.06 discount to the JKM (Japan-Korea Marker) LNG price.Prior to that, the duo had sold 7.5 mmscmd of gas at a discount of USD 0.18 per mmBtu to JKM.The government sets a cap or ceiling rate at which natural gas from difficult fields like deepsea can be sold. This cap for the period October 1, 2022, to March 31, 2023, is USD 12.46 per mmBtu.Reliance has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 — the largest among the lot — were brought into production in April 2009, and MA, the only oilfield in the block, was put to production in September 2008.While the MA field stopped producing in 2020, output from D-1 and D-3 ceased in February 2021.Since then, Reliance-bp is investing USD 5 billion in bringing to production three deepwater gas projects in block KG-D6 — R-Cluster, Satellites Cluster, and MJ which together are expected to meet about 15 per cent of India’s gas demand by 2023. PTI ANZ DRR(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)Featured Video Of The DayWhat Market Watchers Say About China Unrest And The Global Impact
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