Ravva gas price nears resolution

Vol 13, PW 6 (27 Aug 09) News in Brief

GAIL and Cairn India are soon expected to resolve a stalemate over the price of gas sold from the main Ravva oil and gasfield and nearby satellite fields.

“We think we can reach agreement soon,â€‌ confirms a GAIL source. “We have a directive from the ministry.

â€‌ Since October last year, GAIL has opposed Cairn attempts to charge a uniform $5.73/mmbtu for its Ravva and satellite fields gas. Till now, Cairn has been charging $3.5/mmbtu for â€کold gas’ from Ravva and $4.3/mmbtu for â€کnew gas’ from the satellite fields.

GAIL adds that it is holding regular meetings with the Ravva consortium of Cairn India (22.5%) and partners Marubeni (12.5%), Petrocon (25%) and ONGC (40%) to reach agreement. Contacted by this report, Cairn declined to comment and oil ministry officials were unavailable.

Ravva and the satellite fields produce up to 1.8m cm/d. In April this year, Cairn asked GAIL to pay $6.75/mmbtu following a â€کprice discovery’ exercise.