NEW DELHI: Reliance Industries (RIL) and its partner UK-based bp sought bids for 6 million standard cubic metres per day of more gas from their KG-D6 block. As per the reports citing tender documents, the electronic auction will be held on May 19 for the gas from the MJ field that will begin supplying from June 1, 2023.
As per the tender documents, bidders have been asked to quote a variable ‘v’ over and above the JKM price, the spot market benchmark for liquefied natural gas (LNG) delivered to Japan and South Korea. The starting bid price is V = $ -0.06 (minus 0.06) per mmBtu.
Currently, JKM price is about $11.5 per million British thermal units. And the start price of the auction translates into a gas price of $11.44 per mmBtu and at the ceiling, it would result in a price of $12.25. Bidders can seek volume for a tenure of 3 to 5 years. Reliance-bp had last month sold 6 mmscmd of gas to buyers like state-owned Indian Oil Corporation (IOC), Adani-Total Gas and Shell.
IOC walked away with nearly half of the 6 mmscmd gas sold in an e-auction on April 12 while GAIL bought 0.7 mmscmd, Adani-Total Gas 0.4 mmscmd, Shell 0.5 mmscmd, GSPC 0.25 mmscmd and IGS another 0.5 mmscmd. Gas produced from wells drilled below the seabed is used to produce electricity, make fertiliser or turned into CNG for powering automobiles or piped to household kitchens for cooking as well as in industries.