(T.E.T)
Reliance Industries Ltd has sold natural gas produced from a coalfield in Madhya Pradesh for over USD 23 to firms, including GAIL, GSPC and Shell, but its price discovery was beaten by smaller explorer HOEC, which sold half of its sales volume for over USD 25. Reliance sold 0.65 million standard cubic metres per day (mmscmd) of gas from its coal-bed methane (CBM) block SP-(West)-CBM-2001/1 at a USD 8.28 per million British thermal unit premium over prevailing Brent crude oil prices, two sources with direct knowledge of the matter said.
The firm had sought bids at a premium over the base of 13.2 per cent of Brent crude oil prices. At the current Brent crude oil price of USD 115 per barrel, the base comes to USD 15.18 per mmBtu and adding USD 8.28 premium bid by state-owned gas utility GAIL and other firms, the final price comes to USD 23.46 per mmBtu. The price bid was 9.2 per cent of the prevailing rate of Brent crude oil price, which translated into a rate of USD 10.58 per mmBtu at current oil prices. Reliance started commercial gas production from the CBM blocks in March 2017 and reached a peak of 1.10 mmscmd in 2018. CBM is natural gas stored or absorbed in coal seams and contains 90-95 per cent methane.
