Oil and Natural Gas Corporation Ltd (ONGC) on Monday invited bids from prospective buyers for the inaugural sale of 2 mmscmd gas from the Cluster 2 fields in its deepwater KG-DWN-98/2 block off the eastern coast.
“ONGC is planning to conduct an online competitive auction for sale of KG-DWN-98/2 gas. In line with this, it has launched an e-auction for sale of 2.0 mmscmd of natural gas. ONGC is aiming to complete the auction process at the earliest,” the firm said in its tender document.
The term of the contract will be 3-5 years, with the delivery point at Odalarevu in the East Godavari district of Andhra Pradesh. The gas price will be benchmarked against international crude prices, with bids sought at a minimum of 10.5 per cent of the Brent crude price.
For the April-September period, however, prices are limited by the ceiling of $3.62 per mmbtu, determined by the Centre once every six months. The ceiling will next be revised in October.
Gas production from ONGC’s deepwater field kicked off earlier this year. Average gas production from the project is expected to reach around 3-4 mmscmd in the ongoing financial year and 8.5 mmscmd in the financial year 2023, Subhash Kumar, Director, Finance, ONGC, had said in February. ONGC estimates that the block will reach peak production by the financial year 2024, he added.
The deepwater field is located beside the KG-D6 block, operated by Reliance Industries Ltd and BP Plc.