Government sets $5.25 price for ONGC C-series gas

The government today approved $5.25 per million British thermal unit as the price of gas produced from Oil and Natural Gas Corp's C-series fields in the Mumbai offshore fields.

The state-owned oil explorer had initially sought $5.5 per mmBtu, but the petroleum and natural gas ministry last month approved a price of $5.25 per mmBtu, according to an NDTV report quoting a senior ministry official.

Natural gas produced from C-Series fields is sold to state-owned distributor GAIL, which markets it to end users.

ONGC began production from C-Series fields last month, and is currently producing between 0.8 and 1.2 million standard cubic metres per day from six or seven wells it has drilled so far. Peak output of 2.8 mmscmd will be reached once all the 15 wells are drilled, which may happen after the monsoon.

The official said the price approved for the C-series field gas is about a dollar more than the price at which Reliance Industries sells gas from the nation's biggest gas field in the Krishna-Godavari basin off the east coast.

Reliance gets $4.215 per mmBtu for the gas it produces from KG-D6 fields off the Andhra coast. The price is fixed for the first five years of production - till March 2014.