Mukesh Ambani-led Reliance Industries Ltd announced that the company has found very large reserves of natural gas, which require a price of more than USD 10 per million British thermal unit to be developed and produced, said the media reports.
The company wrote to the C Rangarajan Committee that only market-related prices could help in the production of huge domestic resources.
"RIL (and partner) BP have around 5.5 Trillion cubic feet of discovered gas resources which would require large amount of risk capital to be invested. Most of these discoveries would require price of more than USD 10 per million British thermal unit to be developed and produced," the company added.
At present, RIL receives USD 4.2 per mmBtu for the gas produced from its KG-D6 fields in Bay of Bengal. The price which RIL receives is lower than the rate Cairn India gets in the neighboring Ravva Satellite field in the same basin and UK's BG Group-operated Panna/Mukta and Tapti fields in western offshore.
Output from the KG-D6 basin has also slipped drastically due to a number of problems and the company is asking government for market-driven prices for natural gas to restore production, the report stated.
"We trust that the committee will make recommendations... which stipulates that all gas produced by the contractor will be sold at an arm's length market price," RIL wrote in its submission to the committee.