FCC

Vedanta invites bids for natural gas from Rajasthan block

2023-01-02

The floor price for the natural gas from Vedanta's Rajasthan block is $9.57 per mmBtu. According to the e-auction document, Vedanta intends to sell 3 million metric standard cubic metres of gas per day (mmscmd) during an auction scheduled for January 18. Starting on April 1, the supply will be made available for a whole year from the Raageshwari gas terminal in Barmer, Rajasthan.

The domestic formula price, which is updated every six months and is now $8.57 per mmBtu, will serve as the floor price and will be one dollar higher than it. The lowest bidder's premium plus the lower of Platts LNG West India marker or 15.25% of the average Brent price shall be the sale price.

The sale price would be $12.5 per mmBtu at the current Brent price of $82 per barrel and zero premium. Vedanta has complete control over the price of the gas it generates from its Rajasthan block. The majority of the nation's producing fields lack pricing flexibility; thus their gas is sold at the domestic formula price. Gas from challenging fields may be offered for sale at market prices, subject to a cap that is currently set at $12.46 per mmBtu.

The gas market has been experiencing unprecedented upheaval for a little over a year, which has kept prices high and made it exceedingly unpredictable. India's gas imports and usage have decreased as a result. Increased domestic gas production could aid in reducing imports.