Tapti gas will sell at commercial rates from 1st April

Vol 8, PW 19 (15 Dec 04) People & Policy

British Gas and partners ONGC and Reliance have won a major victory in their battle to sell Tapti gas at commercial rates.

On 30th November oil secretary Sushil Tripathi formally permitted the Panna, Mukta and Tapti consortium to bypass GAIL and begin selling Tapti gas on its own from 1st April 2005. The PMT consortium should make its own arrangements to market the gas, Tripathi ruled during a meeting in the ministry.

We cannot let this issue linger any further. This is the only way it can be resolved.

Until now the government has been a silent spectator to the war between the consortium and GAIL over the Tapti gas price. For seven years GAIL has bought Tapti gas at a hugely discounted ceiling price of $3.11 per mmbtu.

But earlier this year the consortium told GAIL it must pay the significantly higher price of $5.57 per mmbtu from 26th June 2004. The new price has been worked out from the formula in the PSC, the consortium told the meeting.

Tripathi agreed, and asked the consortium to formally inform GAIL in writing about the new arrangements from 1st April 2005 so that it could tell its consumers about the non-availability of subsidised Tapti gas after this date. Tripathis agreement came with the condition that the consortium sells the gas at a base price higher than $3.11per mmbtu at Hazira or such price as may be offered by GAIL under the same terms and conditions.

GAIL marketing director UD Choubey made a last-minute attempt to retrieve the situation and asked for more talks to reach a mutually-acceptable agreement. But Tripathi refused.

Enough time has been given to both parties, he said. The consortium will begin marketing only from 1st April 2005.

Theres sufficient time to reach an agreement.

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