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
Infrastructure Urban

Shoals' Q3 2024 revenue falls 23.9% due to project delays, supply chain

Shoals Technologies Group, a U.S.-headquartered manufacturer of electrical balance of systems (EBOS) for solar, energy storage, and e-mobility, reported a 23.9% year-over-year (YoY) decline in revenue, which dropped to $102.2 million in the third quarter (Q3) of 2024. This decline was mainly attributed to project delays and supply chain disruptions. The company posted a net loss of $300,000, a significant improvement compared to the $9.8 million net loss in Q3 2023. Adjusted net income was reported at $13.9 million, reflecting a 58.2% YoY decrease. Adjusted EBITDA stood at $24.5 million, a 4..

Next Story
Infrastructure Energy

FTC Solar sees 67% YoY decline in Q3 revenue from lower volumes

FTC Solar, a U.S.-based provider of solar tracker systems, reported a revenue of $10.14 million in the third quarter (Q3) of 2024, surpassing analyst expectations by $240,680. However, this figure marked a 66.8% year-over-year (YoY) decline compared to the same quarter in 2023, primarily attributed to reduced product volumes. The decline in solar tracker revenue was mainly due to an 82% decrease in the amount of MW produced, which was negatively impacted by delays in customer projects. This was partially offset by an increase in the average selling price (ASP), which led to better pricing an..

Next Story
Infrastructure Urban

Dilip Buildcon wins bid for BharatNet Phase III broadband project

Dilip Buildcon announced on Tuesday, November 12, that its STL-DBL consortium had submitted the lowest bid for BSNL's BharatNet Phase III broadband connectivity project. The USOF-funded project, which aims to provide middle and last-mile connectivity in Jammu Kashmir and Ladakh, is valued at Rs.1,625.36 Crore. Dilip Buildcon holds a 70.23% stake in the implementation of the project. The project is expected to be completed in three years, and the corporation will secure a 10-year maintenance contract. In recent days, BSNL has awarded several contracts for the BharatNet project. On Monday, No..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000