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The Mukesh Ambani-controlled Reliance Industries (RIL) in a letter to the ministry of petroleum and natural gas said that the selling price of gas from the KG-D6 oil block, being operated by RIL, at $4.2 per million metric British thermal unit (MMBTU) is cheaper than the average price of LNG (Liquefied Natural Gas) that Indian consumers pay.
The average price of about 62 million metric standard cubic meter per day of LNG that Indian companies consume works out to $6.9 /mmbtu as against the price of CNG from KG-D6, which has been fixed by the government at $4.2 mmbtu, said the letter. ‘‘Under these circumstances, the statement that there is no demand for KG-D6 gas priced at $4.2/mmbtu is ridiculous," said the letter.
Anil Ambani's RNRL, which is fighting a court battle against RIL for the supply of 28 MMSCMD gas from KG-D6 at $2.34/mmbtu, has recently alleged that there is no demand of gas at $4.2 mmbtu in the country. RNRL said that the comparison between the price of CNG and LNG is not justified. Pointing out that LNG commands the high prices because of its easy portability property, the company said that the comparison of the prices of LNG and CNG is not justified. The company claimed that the price of CNG in the US market is currently hovering around & 2.8 per mmbtu.
However, RIL source said that the prices are charged on the basis of heat energy equivalent and, therefore, they are very much comparable. He further elaborated that the cost of 1 mmbtu heat energy produced from either of the source should be in the same range. Pointing towards RNRL, the letter said, ‘‘The sole purpose of the malicious campaign seems to lay claim over significant quantities of gas from KG-D6 at a price which has already been rejected by the government and in fact is 44% lower than the approved price.
In the letter RIL said at present many companies are importing LNG at a price as high as $8.7/mmbtu. Even the domestically produced LNG is being sold in the range of $4.3 /mmbtu to $6.75/mmbtu.
Source: TOI
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