Another attempt to sell Pundi gas

Vol 24, PW 18 (29 Jul 21) News in Brief

ONGC has re-launched a tender to sell gas from its 1-sq km Pundi gasfield in Tamil Nadu - the highest producing of more than 20 small areas that make up ONGC's Cauvery asset.

On July 19 (2021), ONGC offered up to 37,500 cm/d for five years with an August 31 (2021) bid deadline and a pre-bid slated for July 29 (2021). Anyone interested must bid for a minimum of 2000 cm/d at a premium over the government-set $1.79/mmbtu base price for 'rich' 15,000 Kcal gross calorific value (GCV) gas with 50% methane content.

"We've had informal discussions with potential buyers," reports an ONGC source. "They are enthusiastic about participating after we extended the time to take the gas."

In February 2021, after much ONGC lobbying, the oil ministry agreed to relax a nine-year-old rule forcing buyers to offtake production within three months by extending it to 12 months from the Letter of Award (LoA). ONGC believes Pundi gas will be attractive to CGD companies for sale as CNG because, after processing and compression, it will cost a maximum of Rs20/kg ($0.28).

Pundi currently yields around 45,500 cm/d. Of this, 3500 cm/d has been sold to silicate manufacturer Kiran Global since 2013, and 2000 cm/d to silicate manufacturer Maharaj Soaps since February 2021.

Around 40,000 cm/d is flared. ONGC received no bids in its last tender for Pundi gas in October 2020.