Reliance Industries (RIL) has sought government's permission for selling coal-bed methane (CBM) gas produced at the CBM block at Sohagpur, Madhya Pradesh, at over $13 per million metric British thermal units (mmBtu), which is more than double the price of natural gas produced from its KG-D6 field in the east cost of India.
Reliance has submitted a pricing formula for the CBM gas that seeks to link gas price to Japan's crude cocktail. This proposal, however, is solely for the CBM block at Sohagpur, Madhya Pradesh, the company said.
The formula works out the price of Reliance's CBM gas at 12.67 per cent of the prevailing Japanese Crude Cocktail (around $100 a barrel) plus 0.26 per mmBtu.
This also works out to the price at which RasGas of Qatar sells liquefied natural gas (LNG) on a long-term contract to India.
Reliance plans to produce three million standard cubic meters per day of CBM from the Sohagpur block.
The oil ministry, however, is unlikely to grant approval for RIL's pricing formula as the liquefied natural gas supplied by RasGas and the methane produced by RIL differ in quality and content.