Centre notifies gas prices for new wells at 20 per cent premium versus 10 per cent earlier

New Delhi [India], August 12 (ANI): Petroleum and natural gas ministry has notified the allocation of gas produced from new wells or well interventions from nominated fields of ONGC/OIL at 20 per cent premium over the APM price. APM is an Administrative Price Mechanism.
As per guidelines for domestic gas pricing, domestic natural gas price (APM price) was fixed at 10 per cent of the Indian Crude basket price as announced by Petroleum Planning and Analysis (PPAC) on a monthly basis.
It was provided in the guidelines that for the gas produced from new wells or well intervention in the nomination fields of ONGC/Oil India Limited, there would be a premium of 20 per cent over APM prices (total 12 per cent of Indian Crude basket price for new gas).
The modalities for the same had to be worked out by Directorate General of Hydrocarbon (DGH) for approval of Ministry of Petroleum and Natural Gas (MOP&NG), which the ministry has approved now.
The Ministry said the enhanced price for new gas will make the new gas development projects viable and help the ONGC to augment the production of Natural Gas from nominated fields in challenging areas that require higher amount of capital and technology.
Also, it will enhance the investment capacity in the company to take up development projects which are otherwise capital-intensive and involve higher degree of risks requiring commensurate prices.
ONGC Board has recently approved Daman Upside Development project in our nominated field of Mumbai High at a cost of Rs 7,800 crore for increasing the domestic gas production and job has already been awarded for execution. The peak production envisaged from this project is around 5 MMSCMD.
ONGC Board has also approved another project Integrated Development of 4 Contract areas under DSF-II at a Project cost of Rs 6,000 crore with a peak production of around 4 MMSCMD of gas where the central government has already allowed pricing and marketing freedom under DSF Policy. Job has already been awarded for execution of this project also.
The implementation of the policy decision aligns with the national vision of achieving target of share of natural gas in the Indian energy basket from 6 per cent to 15 per cent by 2030. (ANI)