Reliance Industries, BP seek bids for gas from their KG D6 block.

Reliance Industries and BP have sought bids for 5.5 million metric standard cubic meters per day (mmscmd) of gas available for sale from their KG D6 block.

The e-auction is slated for April 23 and the gas supply will start from late April or early May, as per the tender document. Bidders will have to quote a price linked to Platts JKM (Japan Korea marker), the liquefied natural gas (LNG) benchmark price assessment for spot physical cargoes.

The lowest bid that can be placed is JKM minus $0.3 per mmBtu. The highest acceptable bid would be JKM plus $2.01 per mmBtu.

Bidders can seek a supply tenure of 3 to 5 years. The minimum volume one could ask for is 0.01 mmscmd and the maximum could be the full volume on offer.

Reliance and BP have the freedom to market and price the gas produced from the deepwater gas fields of R Cluster, MJ and Satellites in the KG D6 block but prices can’t rise above a ceiling the government revises every six months. The current price ceiling is $3.62 per mmBtu.

ET