Country’s largest explorer, Oil and Natural Gas Corporation (ONGC) may have to settle for

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about $5 per million British thermal unit (mBtu) of gas from its C-series field located off the Daman coast.

This is lesser than $5.5 per mBtu sought by the firm from nodal petroleum ministry that is currently reviewing the prices of gas. “The price will be less than what ONGC has quoted. It will be more than $4.75 per mBtu but less than $5.5 per mBtu,” a petroleum ministry official to­ld Financial Chronicle on Wednesday. The ministry will shortly issue a formal letter to ONGC with the pr­ice it should charge from its customers. Sudhir Vasudeva, director (offshore) at ONGC who also look after marketing was not immediately available for comment.

Commercial production is expected to commence shortly from the field. The initial production from eight wells in the field located nearly 60 km away from Daman is expected to be around 0.8 million metric standard cubic metres of gas per day (mmscmd). It will go up to 3 mmscmd in a year. ONGC has spent over Rs 3,000 crore for development of the field in Tapti Daman block.

The current production-sharing contract (PSC) offers marketing flexibility to contractor of the field. But, following Supreme Court verdict on a case between Mukesh Ambani-led RIL and Anil Ambani-led RNRL, petroleum ministry is exercising its authority to look into issues of pricing and marketing of natural gas.

The price sought by ONGC is around 30 per cent over that settled for KG basin gas developed by RIL. Government has set $4.2 per mBtu for RIL customers. Government has recently set $ 4.2 per mBtu as the price for gas from nominated fields of ONGC and Oil India (OIL).

ONGC has tied up with Gail (India) for marketing of gas. The customers that are currently buying cleaner fuel from spot market would be benefited from this new source of domestic gas. ONGC is likely to commence commercial production as soon as price of the gas is decided.