Wednesday, October 5, 2022

Reliance Industries postpones bidding for KG-D6 block

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New Delhi: Reliance Industries has postponed bidding for the new gas it plans to produce from eastern offshore KG-D6 block to November, yielding to a request from potential bidders, sources said. The bidding was slated to take place on October 11, according to the bid document.

What’s the new date Reliance Industries KG-D6 block bidding?

The bidding was deferred as some bidders had requested that the process be postponed until after the festive period in October. According to sources, bidding for Reliance Industries’ KG-D6 block is now scheduled to take place on November 6.

Bidders have been asked to quote a price (expressed as a percentage of the dated Brent crude oil rate), supply period and the volume of gas required.

The backdrop

Reliance and its partner BP Plc of the UK had issued a Notice Inviting Offer (NIO) in September, seeking bids from potential users for the 5 million standard cubic metres per day of natural gas they plan to produce from the R-Cluster Field in KG-D6 block from the second quarter of 2020. Reliance set a minimum quote of 9 percent of dated Brent price — which means bidders would have to quote 9 or a higher percentage for seeking gas supplies.

At $60 per barrel, the gas price comes to $5.4 per million British thermal unit (mmBtu). The rate sought compares to the government-mandated $3.23 price that the currently producing Dhirubhai-1 and 3 fields in KG-D6 block get.

Govt gas policy provides for a higher cap

The government gas pricing policy, however, provides for a higher cap price for future gas produced from difficult fields like those in deep sea. This cap currently is fixed at $8.43 per mmBtu.

Reliance-BP is developing three sets of fields in KG-D6 block — R-Cluster, Satellites and MJ — by 2022 that can produce a peak of 30 mmscmd of gas.
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