Natural Gas Price

At present, there are broadly two pricing regimes for gas in the country – gas priced
under APM and non-APM or free market gas. The price of APM gas is fixed by the
Government. As regards non-APM/free market gas, this could also be broadly sub-
divided into two categories, namely, imported LNG and domestically produced gas from
JV fields. While the price of LNG imported under term contracts is governed by the SPA
between the LNG seller and the buyer, the spot cargoes are purchased on mutually
agreeable commercial terms. As regards JV gas, its pricing is governed in terms of the
PSC provisions.

Price of APM natural gas produced by Nationanal Oil Companies w.e.f. 01.06.2010

MoP&NG, w.e.f June 1, has revised the natural gas pricing mechanism as under

1. Price of APM natural gas produced by National Oil Companies has been fixed at
US$ 4.2/ mmbtu less royalty. Hence the APM price inclusive of royalty would
be US$ 4.2/mmbtu. Other features are :

 The Price on NCV basis.

 The price would be converted to Rs/mscm ( @10,000 Kal/scm) at the RBI

reference exchange rate of the month previous to the month during which
supply of AP gas is made. The Price would be excluding cess,
transportation charges, marketing margin/service charge, taxes etc.

2. North Eastern customers would get a discount of 40% on NCV basis. Difference
would be paid to ONGC & OIL through Government budget.

3. Marketing margin of Rs. 200/mscm would be payable by the customers to the

company marketing the gas produced by NOCs.

4. ONGC and OIL would have the freedom to sell any production from new fields in
their nominated blocks at non-APM rate
 Gas pipeline networks in India

1. Existing Pipeline Network

There are presently three major pipeline entities in gas transportation across the country
i.e. GAIL, RGTIL and GSPCL. GAIL is operating HVJ & DVPL trunk pipeline to
evacuate APM , JV & R-LNG from ONGC and PLL, consisting about 7000 km (about
67%) being owned & operated by GAIL. RGTIL is operating 1375 km East West
pipeline (EWPL) to evacuate gas from KG-D6 gas in Andhra Pradesh. This pipeline
passes through Andhra Pradesh, Maharashtra and Gujarat and integrated with GAIL’s &
GSPL network to reach Northern and Western India market. GSPL is mainly focused in
the state of Gujarat. In addition GAIL also operates regional gas pipeline network across
India mainly in Uran, K.G.Basin, South Gujarat. The spread of pipeline network of
different transporter is given as under:

Transporter (in KM) (in %)

1 GAIL 7241 67%
2 RGTIL 1375 13%
3 GSPL 1660 15%
4 AGCL/OIL* 500 5%
Total 10776 100%
* approximately

The natural gas is primarily sourced from KG-D6,Mumbai offshore, Cambay Basin,
Ravva Offshore, KG Basin, Cauvery basin and Imported LNG.

2. The details of major pipeline trunk pipe line network existing, planned and under
execution are attached :