The Petroleum Ministry will seek the Cabinet Committee on Economic Affairs’ (CCEA) nod ‘within a month’ for pricing of gas produced from coal seams – Coal Bed Methane.
Private sector players Reliance Industries Ltd (RIL) and Essar have been awaiting price approvals for close to a year.
According to Essar Oil, the discovered price for gas flowing from its CBM block in West Bengal is $4.2/mmBtu (well head). Reliance Industries has arrived at a price of about $12/mmBtu.
“The Petroleum Ministry is in the final stages of preparing the Cabinet note. It will be sent for CCEA’s approval within a month,” said a senior Ministry Official.
When asked if the nodal Ministry would change the prices quoted by the companies, the official said, “No, we cannot do that. We will send to CCEA the same prices quoted by the contractors along with the Ministry’s views.”
He did not divulge the views Ministry is likely to offer to CCEA. The Ministry is in a fix because though both companies have followed the same mechanism to arrive at the price, there is a huge differential in the end prices.