Indian Oil top bidder for Reliance's KG gas for 2nd consecutive auction

12 Jun 2023 , 10:30 AM

The largest oil company in the country, Indian Oil Corporation (IOC), has walked away with half of the natural gas that Reliance Industries Ltd. and its partner, bp of the UK, offered in the most recent auction of the fuel needed to create CNG, generate electricity, and fertilizer. 

The volume bids were made on behalf of seven fertilizer factories by the oil refining and marketing company, which had previously won the highest bid in the auction for gas from Reliance-bp’s KG-D6 offshore block in the east.

A total of 0.5 mmscmd of city gas, secured by firms like GAIL Gas Ltd, Mahanagar Gas Ltd, Torrent Gas, Indian Oil Adani Gas Ltd, and Haryana City Gas, will be converted into CNG for sale to automobiles and piped into homes’ kitchens for cooking.

According to news reports, Gujarat State Petroleum Corp (GSPC) and refiner Hindustan Petroleum Corporation Ltd (HPCL) each received 0.6 mmscmd, while Shell received an additional 0.2 mmscmd.

Reliance-BP is now ramping up supply after two years ago reversing the downward trend in domestic gas output by bringing to production their second wave of discoveries in the KG-D6 block located in the deep waters of the Bay of Bengal.

The e-auction, according to reports, began on May 19 and finished on May 23. This was its longest duration since operators were permitted to sell petroleum through open tender.

Gas extracted from wells dug below the seabed is used in industries, to power vehicles, to make fertilizer, to power homes’ kitchens, to make CNG, and to generate energy.

The price found in that electronic auction was USD 0.06 less expensive than the JKM (Japan-Korea Marker) LNG price.

Prior to that, the team had offered JKM a discount of $0.18 per mmBtu on 7.5 mmscmd of petrol.

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