According to The Economic Times article published on May 1, 2023, the consortium of Reliance Industries and BP has sought bids for 6 million metric standard cubic meters a day (mmscmd) of natural gas from its KG D6 block off the eastern coast, according to the tender document.
The electronic auction will be held on May 19 for the gas from the MJ field, which will begin supplying from June 1. Bidders are expected to quote a variable above the JKM price, the spot market benchmark for liquefied natural gas (LNG) delivered to Japan and South Korea. The variable can be a positive or negative number. The JKM price is around $11.55 per mmbtu at present.
A minimum volume of 10,000 standard cubic meters per day can be bid while the maximum bid volume would depend on the bidders’ net worth and past gas consumption. For bids up to 1 mmscmd of gas, bidders don’t need to meet any minimum net worth or past gas consumption criteria.
Bidders can seek volume for a tenure of 3 or 4 or 5 years.
The new supply from RIL-BP fields will add to the domestic production, helping cut imports that comprise about 44% of the country’s total gas consumption. India produced about 92 mmscmd of gas and consumed about 165 mmscmd in 2022-23.
High import dependence makes India vulnerable to global price volatility. In 2022-23, international LNG prices rose to record highs, with JKM touching $69 per mmbtu in August. The global energy crisis also made it hard for Indian firms to secure supplies from overseas, with some suppliers reneging on contracts.
