In a tender, Reliance and BP are looking for proposals from purchasers for 4 million standard cubic meters of gas per day, starting on 1 December 2023, from the KG-D6 block in the Bay of Bengal
To capitalise on the rising oil market, Reliance Industries and its UK partner, BP Plc, have gone back to oil indexation for pricing the gas they extract from the KG basin, which is India’s largest field owned by the private sector.
In a tender, Reliance and BP are looking for proposals from purchasers for 4 million standard cubic meters of gas per day, starting on 1 December 2023, from the KG-D6 block in the Bay of Bengal.
It also stated that the consortium invited offers on 27 October 2023, from interested companies to offtake gas from the gas fields on the terms outlined in the request for proposal (RFP), starting on 1 December 2023, at the delivery point in Gadimoga, Andhra Pradesh.
It requested quotes from bidders indicating the premium (‘v’) they are willing to pay above the price of 12.67 per cent for Brent crude oil. A starting bid price of USD 1.08 per million British thermal units has been set for ‘v’.
The starting price of petrol is equivalent to USD 11.8 per mmBtu (12.67 per cent of USD 85 plus USD 1.08) at the current price of Brent crude oil. According to the tender, the highest bid amount against ‘v’ will be USD 4.5 per mmBtu.
However, the sale price will be lower of the amount determined by the bidding process and the maximum rate set by the government for gas from challenging fields like deep sea.