Reliance Industries (RIL) will sell the natural gas it produces from coal seams in Madhya Pradesh to its own units in Gujarat and Maharashtra at $4.23 per million British thermal units. After last month’s government decision to give coal bed methane (CBM) producers freedom to discover market price, RIL invited bids from users of gas.
Five companies including RIL participated in the bidding process. The bidders besides RIL were Deepak Fertilizer & Petrochemicals Corp, state-owned gas utility GAIL India and GMR’s Rajahmundry and Vemagiri power plants.
While RIL bid $4.23 per mmBtu price for using the gas at its petrochemical plants at Patalganga and Nagothane in Maharashtra and Jamnagar in Gujarat, Deepak Fertilizer was a close second bidding $4.159. GAIL put in a bid of $4.009, while GMR quoted $2.48 per mmBtu for both the plants.
The price discovered is almost the same as $4.205 per mmBtu price fixed for RIL’s eastern offshore KG-D6 gas field for first five years of production beginning April 2009.