Bidders should quote a worth linked to Platts JKM (Japan Korea marker), the liquefied pure fuel (LNG) benchmark worth evaluation for spot bodily cargoes.
The bottom bid that may be positioned is JKM minus USD 0.Three per million British thermal unit. The best acceptable bid can be JKM plus USD 2.01 per mmBtu.
This is similar benchmark the RIL-BP had utilized in February to promote out 7.5 mmscmd of fuel from the block.
At present worth, the bottom worth for the 5.5 mmscmd of fuel that RIL-BP are auctioning comes to close USD 6.5 per mmBtu. However they are going to be entitled to a most of USD 3.62 per mmBtu ceiling fastened by the federal government for a six-month interval to September 30.
The consortium of RIL and BP Exploration (Alpha) Restricted (a unit of BP Plc) “is creating deepwater fuel fields viz. the R Cluster (D34), MJ (D55) and Satellites & Different Satellites (D2, D22, D29 and D30) within the KG D6 block,” the tender doc stated.
The fuel to be produced from the fields has been granted advertising and pricing freedom however that is topic to a ceiling worth that the federal government fixes each six month. The ceiling worth for April 1 to September 30, 2021 is USD 3.62 per mmBtu.
Bidders can search a provide tenure of three to five years. The minimal quantity one may ask for is 0.01 mmscmd and the utmost may very well be the total quantity on provide.
“A Bidder shall be required to cite the variable denoted as ‘V’ in USD per mmBtu phrases pursuant to the Gasoline Value method specified beneath: Gasoline Value (in US$/MMBtu (GCV)) shall be = JKM + V,” it stated.
Within the February public sale, RIL picked up two-thirds of the 7.5 mmscmd fuel offered. Reliance O2C, an affiliate of RIL, picked up 4.Eight mmscmd of fuel whereas state fuel utility
(India) Ltd received 0.85 mmscmd of provides and Shell 0.7 mmscmd.
Adani Complete Gasoline received 0.1 mmscmd, Hindustan Petroleum Company Ltd (HPCL) 0.2 mmscmd and Torrest Gasoline 0.02 mmscmd.
Different patrons embrace IRM Power (0.1 mmscmd), PIL (0.35 mmscmd) and IGS (0.35 mmscmd).
Sources stated the fuel was purchased at a worth of USD 0.18 per mmBtu low cost to JKM i.e. worth of JKM (minus) USD 0.18 with tenures starting from Three to five years.
Reliance O2C is the brand new unit that holds the agency’s refinery and petrochemical property.
The April public sale can be the third time RIL-BP carried out an e-bidding course of which ran on a dynamic ahead public sale foundation on the market of KG-D6 fuel. In November 2019, 5 mmscmd of pure fuel was offered at worth within the vary of round 8.6 per cent of Brent crude oil for tenure starting from 2 to six years.
RIL-BP began manufacturing of fuel on December 18 final 12 months from the R Cluster ultra-deep-water fuel subject in block KG D6 off the east coast of India. Essar Metal, Adani Group and GAIL had purchased the vast majority of fuel offered in that public sale by bidding between 8.5 and eight.6 per cent of dated Brent worth.
RIL-BP is investing USD 5 billion in bringing to manufacturing three deepwater fuel tasks in block KG-D6 R-Cluster, Satellites Cluster, and MJ which collectively are anticipated to fulfill about 15 per cent of India’s fuel demand by 2023.
R-Cluster could have a peak output of 12.9 mmscmd whereas satellites, that are supposed to start output from the third quarter of the 2021 calendar 12 months, would produce a most of seven mmscmd. MJ subject will begin manufacturing within the third quarter of 2022 and could have a peak output of 12 mmscmd.
Reliance has thus far made 19 fuel discoveries within the KG-D6 block. Of those, D-1 and D-3 — the most important among the many lot — have been introduced into manufacturing from April 2009 and MA, the one oilfield within the block was put to manufacturing in September 2008.
Whereas the MA subject stopped producing final 12 months, output from D-1 and D-Three ceased in February.
Different discoveries have both been surrendered or taken away by the federal government for not assembly timelines for starting manufacturing. Reliance is the operator of the block with 66.6 per cent curiosity whereas BP holds the remaining stake.