Reliance seeks bids for sale of KG-D6 gas at rates linked to JKM

NEW DELHI: Reliance Industries Ltd and its spouse bp plc of the United kingdom have sought bids for the sale of all-natural gasoline from the eastern offshore KG-D6 block at a value linked to the level at which LNG is delivered to Japan and Korea.
The two partners invited bids for the sale of 6 million common cubic meters for each working day of fuel starting up February 2023, according to the tender doc.
Buyers these types of as town fuel operators that transform fuel into CNG for sale to automobiles and pipe it to residence kitchens for cooking needs, or ability plants that use it to produce electrical power or fertilizer models that use it to make urea, have been requested to quotation top quality they are prepared to spend above the JKM rate.
JKM is the Northeast Asian spot cost index for LNG shipped ex-ship to Japan and Korea. JKM selling price for February is $28.83 for every million British thermal device.
Bidders have been questioned to quote variable ‘V’ in the gasoline value formulation ‘JKM + V’.
The starting up bid for ‘V’ has been set at $(minus) .30 per mmBtu. “Every single Bidder is needed to enter bids that are larger than or equal to the starting” bid quotation, the tender document stated.
The optimum valid bid for ‘V’ shall be $5.01 for each mmBtu outside of which the bid shall not be recognized by the e-bidding portal, it stated.
The gas selling price, it stated, shall be bigger of the federal government-established ceiling cost for fuel generated from deepsea fields or the lower of selling price arrived at the bidding and the ceiling selling price.
In May possibly very last year, Reliance-pb had auctioned 5.5 mmscmd of incremental gasoline from the newer discoveries in the KG-D6 block, benchmarking it to the similar JKM gasoline marker.
Three-fourths of that quantity was picked-up by Reliance and its affiliates.
The price tag uncovered in that e-auction came at a $.06 discount to the JKM (Japan-Korea Marker) LNG rate.
Prior to that, the duo had bought 7.5 mmscmd of gas at a price reduction of $.18 for each mmBtu to JKM.
The federal government sets a cap or ceiling level at which purely natural gasoline from complicated fields like deepsea can be offered. This cap for the period of time October 1, 2022, to March 31, 2023, is $12.46 per mmBtu.
Reliance has so significantly designed 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 — the greatest amid the whole lot — have been brought into production in April 2009, and MA, the only oilfield in the block, was put to manufacturing in September 2008.
Even though the MA field stopped creating in 2020, output from D-1 and D-3 ceased in February 2021.
Due to the fact then, Reliance-bp is investing $5 billion in bringing to generation three deepwater fuel tasks in block KG-D6 — R-Cluster, Satellites Cluster, and MJ which with each other are envisioned to meet up with about 15 per cent of India’s gasoline demand by 2023.