Tripura to see more ONGC gas at market rates

Vol 13, PW 16 (28 Jan 10) Midstream & Downstream

Tripura in India’s volatile northeast used to be a region where you could sell gas only at the government subsidised â€کnortheastern’ price of around $2/mmbtu, or Rs1920 per 1000 cubic metres.

But no longer! Under new government rules ONGC has begun selling gas at a more respectable $4.25/mmbtu, or Rs4125 per 1000 cubic metres. Beginning April this year, ONGC will start supplies of 200,000 cm/d to the Tripura State Electricity Corporation (TSEC), quietly displacing GAIL as the supplier of choice in this highly gas prospective landlocked region on Bangladesh’s eastern border.

ONGC is already supplying 100,000 cm/d to TSEC since last April. ONGC today produces around 1.67m cm/d in Tripura, mainly from its â€کjewel in the crown’ Agartala Dome gasfield (670,000 cm/d), but also from Baramura (200,000 cm/d), Rokhia (300,000 cm/d) and Konaban (500,000 cm/d).

For years this gas has been sold through GAIL to the state’s power sector at hugely attractive rates, introduced by Delhi to stimulate economic growth in this isolated outpost. But under new legislation Delhi permits ONGC to sell newly discovered gas at market rates.

“ONGC first asked GAIL to start selling gas at market driven rates,â€‌ we hear. “But for some reason GAIL could not.

So, ONGC started selling direct to customers.â€‌ This trend is set to continue: ONGC is setting aside 500,000 cm/d at $4.25/mmbtu for NEEPCO, a second local power generation company, with first supplies to begin in 2013, when ONGC expects Tripura gas production to jump to 6m cm/d.

By far the biggest chunk of this new production will go to a proposed 726-MW gas-fired power station promoted by the ONGC Tripura Power Company (OTPC). Around 3m cm/d is promised to OTPC, but only 2.65m cm/d has been formally contracted, again at $4.25/mmbtu.

Does GAIL object to this encroachment onto its turf “Even if GAIL objects,â€‌ we hear, “ONGC is hardly bothered.â€‌

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