BP seeks three-fold hike in KG-D6 gas price
27 February 2012
BP Plc, which partners Reliance Industries in the Krishna-Godavari gas fields off the east cost of India, has made a strong pitch for import parity pricing of natural gas produced from the KG-D6 blocks, against its current price of $4.2 per million British thermal units (mmBtu).
BP, which last year bought a 30-per cent stake in 23 oil and gas blocks of RIL, now wants gas from the KG-D6 field to be priced on a par with liquefied natural gas (LNG) imported from Qatar on a long-tem basis, which is around $12.67 per mmBtu.
The RIL-BP combine will submit a revised proposal for development of the KG-D6 block, with production and spending projections, to the government in the next few weeks, BP India head Shashi Mukundan said today.
He said BP is seeking market prices for gas produced in India, including output from the newer discoveries.
For the future India needs to have a market- determined price for gas, Mukundan said, adding, the company hoped to get import parity pricing for gas.
"We need to make sure predictable market pricing regime as envisaged in production sharing contract. Crude oil is sold at import parity, refinery products are sold at import parity… We hope that we get similar kind of pricing regime for gas as well," Mukundan said.