State-run ONGC on Monday said, the Ministry of Petroleum & Natural Gas (MoPNG) notification on higher price for gas produced from new wells or well intervention in nomination fields of ONGC and Oil India will make new developments viable.
The MoPNG has notified that allocation of gas produced from new wells or well interventions from nominated fields of ONGC and Oil India (OIL) will be at 20 per cent premium over the administered price mechanism (APM) price, the exploration and production (E&P) major said.
The modalities for the same had to be worked out by the Directorate General of Hydrocarbon (DGH) for the approval of the Oil Ministry, it added.
As per the guidelines for domestic gas pricing, domestic natural gas price (APM Price) was fixed at 10 per cent of the Indian crude basket price as announced by Petroleum Planning and Analysis (PPAC) on a monthly basis.
Policy aligned with the national vision
“The enhanced price for new gas will make new gas development projects viable and help ONGC to augment production of natural gas from nominated fields in challenging areas that require higher amounts of capital and technology,” ONGC said.
This will enhance the investment capacity in the company to take up development projects which are otherwise capital intensive and involve higher degree of risks requiring commensurate prices, it added.
Recently, ONGC Board approved the Daman Upside Development project in its nominated field of Mumbai High at a cost of around ₹7,800 crore for increasing the gas production and the job has already been awarded for execution. The peak production envisaged from this project is around 5 million standard cubic meters per day (MSCMD).
ONGC Board has also approved another project on integrated development of four contract areas under DSF-II at a project cost of around ₹6,000 crore with a peak production of around 4 MSCMD of gas where the Centre has already allowed pricing and marketing freedom under Distributed Small Fields (DSF) policy. Job has already been awarded for execution of this project also, it added.
The implementation of the policy decision aligns with the National vision of achieving the target of share of natural gas in the Indian energy basket from 6 per cent to 15 per cent by 2030.