Essar sells CBM gas at $9.16-11.63; GEECL at $8.46-22.01

Essar Oil is selling gas from coal seam (CBM) at $9.16 to $11.63 while Great Eastern Energy Corp Ltd (GEECL) sells the same at $8.46 to 22.01, the Lok Sabha was informed today.

State-owned Oil and Natural Gas Corp (ONGC), which is one of the three operators producing coal-bed methane (CBM), charges $5.71 per million British thermal unit.

Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi in a written statement in response to a question in Lok Sabha said GEECL sold 75.51 million cubic metres of coal gas from its Raniganj South CBM block in West Bengal at $8.46 per mmBtu to $22.01 per mmBtu rate in 2012-13.

Essar Oil fetched $9.16 to $11.63 per mmBtu for 8.07 mcm of gas from its Raniganj East CBM block while ONGC sold 2.95 mcm gas from its Jharia CBM block at $5.71 per mmBtu in 2012-13, she said.

The price realised compares to $4.2 per mmBtu price for natural gas produced from conventional fields by ONGC and Reliance Industries. Small quantities of conventional gas from western offshore fields are also sold at $5.71 per mmBtu.

"Commercial quantity of CBM gas is being produced in one block, namely, Raniganj South operated by GEECL. Small quantities of incidental gas is being produced in two CBM blocks viz Raniganj East and Jharia by Essar and ONGC respectively," she said.

The Minister said the gas sale price realised from different customers by the three CBM producers "is as per Gas Sales Agreement between the operators and buyers."

"The valuation of CBM gas produced and saved from the field/development area is based on arms-length prices and is defined under Article 18 of the CBM contract," she added.

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