India Eases Gas Marketing Rules

Indian government on October 7 approved a standardised e-bidding process to calculate the price of gas to be sold in the market by gas producers. Petroleum and natural gas minister Dharmendra Pradhan said that the process would be formulated by the upstream regulator, directorate general of hydrocarbons, for the transparent calculation of gas prices.

The new policy also allows affiliates of producers such as Reliance Industries to take part in the bidding process. The government said this would facilitate and promote more competition in gas marketing. However, contests will be repeated if only the affiliates participate.

“The policy aims to provide standard procedure for sale of natural gas in a transparent and competitive manner to discover market price by issuing guidelines for sale by contractor through e-bidding. This will bring uniformity in the bidding process across the various contractual regimes and policies to avoid ambiguity and contribute towards ease of doing business,” the government said.

The government has also granted marketing freedom to the field development plans of those blocks in which production sharing contracts already provide pricing freedom.

The government already provides for pricing and marketing freedom of gas from blocks awarded under the Discovered Small Field Policy, Hydrocarbon Exploration and Licensing Policy and coalbed methane contracts, and discoveries from difficult fields such as deep water, ultra-deep water and high pressure-high temperature areas. Also, all discoveries and field development plans approved after February 28, 2019 have complete market and pricing freedom.