Government approves 20% premium price hike for gas from new ONGC wells
OIL & GAS

Government approves 20% premium price hike for gas from new ONGC wells

The government has sanctioned a 20% premium over the regulated price for natural gas produced from new wells by Oil and Natural Gas Corporation (ONGC). This decision aims to enhance the viability of new gas development projects. Currently, domestic gas pricing operates under two main regimes. Gas from legacy fields, managed by ONGC and Oil India Ltd, is priced at 10% of the imported crude oil price, capped at $6.50 per million British thermal units (mmBtu). For instance, with the Indian crude oil basket price at $77 per barrel, the APM price for ONGC's gas from Mumbai High and Bassein fields would be $7.70 per mmBtu, but the cap price is applied. Gas from challenging fields, such as deep-sea locations, is priced higher due to increased production costs. For the six months starting April 1, this rate is set at $9.87 per mmBtu. Under last year's guidelines, a 20% premium over the APM price was established for gas from new wells, even within legacy fields. The Ministry of Petroleum and Natural Gas has now officially implemented this premium. ONGC stated, ?The domestic gas price (APM price) is fixed at 10% of the Indian crude basket price as announced by the Petroleum Planning and Analysis Cell (PPAC) monthly. The guidelines included a 20% premium for gas from new wells or interventions in ONGC/Oil India Ltd?s nominated fields, totalling 12% of the Indian crude basket price for new gas.? This policy adjustment is expected to improve the viability of new gas projects, helping ONGC increase production in challenging areas that require significant investment and technology. ONGC's board recently approved the Rs 78 billion Daman Upside Development project in the Mumbai High field, aiming for peak production of about 5 million standard cubic meters per day. Another project, involving the integrated development of four contract areas under DSF-II, was approved with a cost of Rs 60 billion and a peak production target of around 4 mmscmd. This project benefits from pricing and marketing freedom under the DSF Policy. ?The implementation of this policy supports the national goal of raising the share of natural gas in India?s energy mix from 6% to 15% by 2030,? ONGC added. (ET)

The government has sanctioned a 20% premium over the regulated price for natural gas produced from new wells by Oil and Natural Gas Corporation (ONGC). This decision aims to enhance the viability of new gas development projects. Currently, domestic gas pricing operates under two main regimes. Gas from legacy fields, managed by ONGC and Oil India Ltd, is priced at 10% of the imported crude oil price, capped at $6.50 per million British thermal units (mmBtu). For instance, with the Indian crude oil basket price at $77 per barrel, the APM price for ONGC's gas from Mumbai High and Bassein fields would be $7.70 per mmBtu, but the cap price is applied. Gas from challenging fields, such as deep-sea locations, is priced higher due to increased production costs. For the six months starting April 1, this rate is set at $9.87 per mmBtu. Under last year's guidelines, a 20% premium over the APM price was established for gas from new wells, even within legacy fields. The Ministry of Petroleum and Natural Gas has now officially implemented this premium. ONGC stated, ?The domestic gas price (APM price) is fixed at 10% of the Indian crude basket price as announced by the Petroleum Planning and Analysis Cell (PPAC) monthly. The guidelines included a 20% premium for gas from new wells or interventions in ONGC/Oil India Ltd?s nominated fields, totalling 12% of the Indian crude basket price for new gas.? This policy adjustment is expected to improve the viability of new gas projects, helping ONGC increase production in challenging areas that require significant investment and technology. ONGC's board recently approved the Rs 78 billion Daman Upside Development project in the Mumbai High field, aiming for peak production of about 5 million standard cubic meters per day. Another project, involving the integrated development of four contract areas under DSF-II, was approved with a cost of Rs 60 billion and a peak production target of around 4 mmscmd. This project benefits from pricing and marketing freedom under the DSF Policy. ?The implementation of this policy supports the national goal of raising the share of natural gas in India?s energy mix from 6% to 15% by 2030,? ONGC added. (ET)

Next Story
Resources

Madhya Pradesh Champions Inclusive Tourism at Heritage Sites

On the occasion of World Heritage Day, Madhya Pradesh is taking a significant step toward inclusive tourism by making its historical sites accessible to all — especially persons with disabilities. The state is rolling out its ‘Accessibility Infrastructure and Development’ project at Maheshwar, Mandu, Dhar, and Orchha, aiming to create a more welcoming experience at these iconic cultural destinations.The initiative, under the leadership of Chief Minister Dr Mohan Yadav and Tourism Minister Shri Dharmendra Bhav Singh Lodhi, includes infrastructure upgrades such as ramps, Braille signage, w..

Next Story
Resources

Runwal Realty Onboards Sonam Kapoor as Brand Ambassador

Real estate major Runwal has unveiled a refreshed identity as Runwal Realty, signalling a renewed commitment to crafting spaces that stand the test of time. With this refresh, the brand unveils its new philosophy: “Building for Generations to Come” and welcomes Bollywood star and global fashion icon Sonam Kapoor as its brand ambassador. This evolved identity reflects Runwal Realty’s commitment to creating not just homes, but heirlooms—crafted through visionary design, meticulous planning, global design expertise and an unwavering focus on quality. With the customer at its core, each de..

Next Story
Infrastructure Urban

Emerging Trends in Infrastructure and Transport 2025: KPMG

KPMG’s latest report, The Great Reset: Emerging Trends in Infrastructure and Transport 2025 edition, sheds light on the profound changes transforming the global infrastructure landscape. As industries adapt to the challenges posed by climate change, economic pressures, and technological advancements, the report identifies key trends and provides actionable insights for leaders in infrastructure and transport sectors. “In today’s interconnected world, the lack of standardized supply chain practices is not just an operational challenge—it’s an environmental and economic one. We’..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?