BP of the U.K. on Monday came out in support of its partner, Reliance Industries Ltd. (RIL), demanding that the gas price should be at import parity, almost three times higher than the government approved $4.2 per million metric British thermal unit (mmBtu).
According to BP, the import parity would be a rate equivalent to the price at which the gas in its liquid form (liquefied natural gas) is imported from Qatar on a long-term contract.
BP said only Qatar LNG price, which is indexed to crude oil, was the right import parity price. At $100 a barrel oil price, Qatar LNG will cost $12.67 per mmBtu. “We need to make sure a predictable market pricing regime as envisaged in the production sharing contract,'' BP India head Sashi Mukundan told reporters here.
When pointed out that the next price revision was only due in 2014 and the government had ruled out any dialogue on the issue, Mr. Mukundan said a rate linked to the price at which India imported LNG should be applicable to new gas that RIL-BP would produce from the KG-D6 and other blocks.
However, he said, BP agreed with RIL's demand for an increase in the price of gas. This despite RIL had agreed for the $4.2 mmBtu rate for five years ending March 31, 2014.
Mr. Mukundan said RIL and BP were working on an integrated development plan for all the 18 discoveries made in the block and would come out soon with sustainable production numbers soon.
