Billionaire Mukesh Ambani’s Reliance Industries Ltd and its affiliates have picked up more than three-fourths of the new gas volumes from the firm’s eastern offshore KG-D6 block which at current government dictated price will cost it less than half of the imported rate, sources said. Reliance and its partner UK’s BP Plc last week auctioned 5.5 million standard cubic meters per day of incremental gas from the newer discoveries in the KG-D6 block, benchmarking it to a gas marker.
Reliance’s oil-to-chemical (O2C) business unit picked up 3.2 mmscmd gas in the auction, three sources with direct knowledge of the development said. India Gas Solutions (IGS) – a gas sourcing and marketing joint venture of Reliance and BP – picked up another 1 mmscmd, they said.
The remaining volume was picked by Adani Gas (0.15 mmscmd), IRM Energy (0.10 mmscmd), GAIL (30,000 cubic meters per day) and Torrent Gas (20,000 cubic meters per day). Sources said the price discovered in the e-auction came at a USD 0.06 discount to the JKM (Japan-Korea Marker) LNG price.
At current prices, this translates into a price of USD 8-9 per million British thermal unit (mmBtu) but the buyers will end up paying less than half of this rate.