For the CBM gas, it asked buyers to quote a percentage equal to or higher than 8 per cent of Dated Brent Price, according to the tender document.
“Floor price shall be the higher of the USD 4 per million British thermal unit or Domestic Gas Price notified by (government’s) PPAC for the period,” it said.
The PPAC notified price for the six months beginning October 1 for gas from fields given to ONGC and Oil India Ltd on a nomination basis is USD 2.9 per mmBtu.
ONGC has been complaining that the government-notified gas price is way below cost and the company incurs a loss of production and sale of natural gas from most of its fields. It says its cost of production ranges from USD 4.5 to USD 9 per mmBtu for gas from different sources/fields.
For gas from Khubal field, it sought a mark-up over the domestic gas price +(plus) USD 0.5 per mmBtu. The floor or minimum price was set at USD 3.5 per mmBtu, according to the tender.
Earlier this year in April, ONGC had sought bids for the sale of an initial two mmscmd of gas from its KG basin fields.
It had sought bids indexed to Brent crude oil for the gas from the KG-DWN-98/2 or KG-D5 block, which sits net to Reliance Industries Ltd (RIL)-BP Plc-operated KG-D6 fields in the Bay of Bengal.
Bids were sought at a minimum of 10.5 per cent of the three-month average Brent crude oil price. At Brent crude oil price of USD 70, the minimum price came to USD 7.35 per mmBtu.
The tender was however scrapped as consumer consumers went to court against the bidding process.
In the latest tender, ONGC has mentioned a 3 to 5-year sale tenure for CBM gas, with supplies commencing with immediate effect.
ONGC owns 55 per cent in the North Karanpura CBM block in the Ranchi district of Jharkhand. Indian Oil Corporation (IOC) holds 20 per cent and Prabha Energy Pvt Ltd the remaining 25 per cent.
For Khubal field, the gas supplies are to begin from April 2024 and bids have been sought for 3 to 5 years tenure.
While ONGC is seeking a price benchmarked to Brent crude oil, RIL-BP sold about 13 mmscmd of new gas from KG-D6 at a price linked to Platts JKM (Japan Korea marker) – the liquefied natural gas (LNG) benchmark price assessment for spot physical cargoes.
That tender of RIL-BP mandated the lowest bid at JKM minus USD 0.3 per mmBtu. The highest acceptable bid was JKM plus USD 2.01 per mmBtu.