(LiveMint)
State-run Oil and Natural Gas Corp. Ltd (ONGC) may be forced to sell natural gas at a discount to its originally expected price from its newest deepwater block in the Krishna-Godavari basin as gas prices remain subdued due to a supply glut internationally, three people directly aware of ONGC’s discussions said requesting anonymity.
ONGC plans to begin natural gas production from the deepwater block KG-DWN-98/2 in about two to three months and is expected to finalize shortly agreements for the sale of gas from the asset. The company, according to the people cited above, has been in talks since August to assess demand potential from buyers which include Gail India and several city gas distribution companies. “Several buyers who have met ONGC have expressed reservations at buying gas at the upper ceiling, which was initially proposed by ONGC,” said the first person cited above.
