The Directorate General of Hydrocarbons (DGH) has invited proposals from agencies to set up e-platforms for natural gas bidding. This follows a Union Cabinet decision to standardise the format for sale of natural gas from discoveries where pricing freedom has been allowed.
The DGH said the sale of gas can be carried out through any one of the empanelled agencies that it short-lists.
The government, has since 2017, given pricing freedom for natural gas production from all fields other than the ones given to state-owned ONGC and Oil India Ltd on a nomination basis.
Firms such as the Reliance Industries-BP combine as well as ONGC (for non-nomination blocks) have been auctioning gas to users. They would typically devise a formula and seek bids from users.
According to the DGH’s terms, the agency should have experience in conducting e-auctions for any of the commodities such as coal, oil and gas, minerals, ores, stores, and machinery equipment.
It should also have a minimum turnover of ₹200 crore in the past three years. Agencies that have conducted the auction of spectrum can also apply.
DGH stipulations
DGH also said the agency shall design, structure and implement the overall process of e-auction for the discovery of market price for natural gas produced in India while ensuring a transparent, fair and competitive process, in conformance with the guidelines issued by the Centre.
“The agency shall develop an optimum e-auction plan in consultation with the seller, while ensuring adequate safeguards against potential distortion of competition and transparency while taking into account the competition characteristics…The agency shall document the entire process of e-auction and provide all services incidental to the conduct of successful e-auction,” the DGH added.