New Delhi : The government is likely to raise the price of natural gas produced from Cairn India’s eastern offshore Ravva field by 20 per cent to USD 4.2 with effect from June 2010.
The Ravva field is divided into two – Contract Area-1 which produces about 8 million standard cubic feet per day of gas (mmscfd) and Ravva Satellite that generates around 20 mmscfd. Cairn gets USD 4.3 per million British thermal unit (mmBtu) for gas from Ravva Satellite field while it gets USD 3.5 for Contract Area-1. “Even though Cairn gets USD 3.5 for Contract Area-1, GAIL India sells the same gas to consumers at USD 4.2 per mmBtu. The difference is credited to a gas pool account,” a government official said.
He said when consumers are charged USD 4.2, the producer too should get the same price. “There certainly is a case for revision in price as is being demanded by Cairn,” he added.
Once approved by competent authorities, Cairn will get the USD 4.2 price from June 2010, the date from which GAIL has been selling Ravva Contract Area-1 gas at rates similar to the one fixed for state-owned ONGC.
Cairn has been demanding revision in price of gas from the Bay of Bengal fields effective December 1, 2008.
