In a significant move, the Ministry of Petroleum and Natural Gas (MOP&NG) has notified the allocation of gas produced from new wells or well interventions at a 20% premium over the Administered Price Mechanism (APM) price. This decision is expected to make new gas development projects viable, enabling ONGC to augment production from nominated fields in challenging areas.
The enhanced price for new gas will facilitate increased investment in capital-intensive projects, involving higher risks and requiring commensurate prices. This development aligns with the national vision of achieving a 15% share of natural gas in India’s energy basket by 2030. ONGC has already approved projects like the Daman Upside Development and Integrated Development of 4 Contract areas under DSF-II, with a combined investment of ~Rs 13,800 crore.
The implementation of this policy decision is anticipated to enhance domestic gas production, reducing reliance on imports. The peak production from the approved projects is expected to be around 9 MMSCMD. This development is seen as a positive step towards achieving energy security and reducing carbon emissions.
The notification has been welcomed by industry experts, who believe it will encourage exploration and production activities in challenging areas. The move is expected to have a positive impact on the country’s energy landscape, aligning with the government’s vision of a gas-based economy. With this development, India is poised to take a significant step towards achieving its energy goals.
