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BP for parity in gas pricing

business Updated: Feb 27, 2012 21:49 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Seeking a predictable pricing regime for natural gas in India, global energy major BP Plc suggested pricing of gas at import parity, which at present is almost three times the current government fixed price of $4.2 per unit.


BP, which last year bought 30% stake in 23 oil and gas blocks of Mukesh Ambani-led Reliance Industries including the KG-D6 fields, said import parity would be a rate equivalent to the price at which gas in its liquid form (liquefied natural gas) is imported from Qatar on a long-term contract.

At $100 per barrel oil price, Qatar LNG will cost $12.7 per unit as against the present price of gas in India at $4.2 per unit.

"We need to make sure predictable market pricing regime as envisaged in production sharing contract. Crude oil (produced in India) is sold at import parity, refinery products are sold at import parity (and) we hope that we get similar kind of pricing regime for gas as well," BP India head Sashi Mukundan told reporters on Monday.

"Clarity on gas pricing is vital for the development of the next wave of projects, which will add production beyond 2015 but for which investment decisions need to be made now," he added.

Alongside, BP's chief economist, Christof Ruhl said India will become world's third largest economy by 2030 but its energy demand will slow down to 4.5% (vs. 5.5% pe annum in 1999-2010).