Reliance outbids GAIL to buy natural gas from MP block

India Infoline News Service | Mumbai | September 28, 2017 14:30 IST

Reliance Industries has outbid rivals including GAIL, to buy the entire volume of natural gas bed.

Reliance Industries has outbid rivals including GAIL, to buy the entire volume of natural gas bed from its own coal seam blocks until March 2021. 

In the latest bidding for up to 3 million standard cubic metres per day (mmscmd) of gas to be produced during October 2017 and March 2021, Reliance Industries quoted USD 6.26 per mmBtu at the current oil price, reported a leading business daily.

In the month of May, Reliance Industries became the first buyer of the gas it produced from its own coal bed methane (CBM) block in Madhya Pradesh after agreeing to pay the highest price of USD 4.23 per million British thermal unit (mmBtu) for May-June. In the following quarter, it paid an additional 6% at USD 4.50 per mmBtu to take all of the CBM gas from Sohagpur East and Sohagpur West blocks.
 
RIL plans to use the gas at its petrochemical plants in Gujarat and Maharashtra, which run mostly on expensive imported fuel. The bidding formula in all the three bid rounds for CBM gas this year has been the same and the process has been conducted by Crisil Risk and Infrastructure Solutions, a unit of Crisil. 

Piramal Glass was the second-highest bidder quoting USD 4.97 per mmBtu, followed by Gujarat State Petroleum Corporation (GPSC) putting in a bid of USD 4.9. 
 
GAIL bid for 1.5 mmscmd of gas at a price of USD 4.63 per mmBtu while its subsidiary GAIL Gas sought an equivalent quantity at USD 4.11 per mmBtu price.

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