business

Updated: Apr 27, 2015 23:04 IST

As part of India’s proposed additional $6 billion (Rs 36,000 crore) investment in Mozambique’s Rovuma Area-1 gas field, the government is looking to ship home natural gas that is about 30% cheaper than the prevailing international price.

A senior official privy to the ongoing negotiations told HT that three Indian public sector companies invested in the Mozambique field were pushing for a price of $10-11 per million British thermal units (mBtu), inclusive of import duties.

The current final imported price of gas comes to around $15.5 mBtu. The first LNG from the field is likely to be produced around 2018-19.

If India does manage to bring in cheap international gas, it could have a direct bearing on the future cost of domestic cooking gas and also bring down the subsidy outgo on gas supplied to the fertiliser and power sectors.

Three government-owned oil companies of ONGC Videsh Ltd (OVL), which is the ONGC’s overseas investment arm, Oil India Ltd (OIL) and Bharat Petroleum Corp Ltd (BPCL) together have a 30% stake in the field, which has recoverable reserves in the range of 70 trillion cubic feet (tcf) of gas. “At 30% stake, India’s share should be 21 tcf, but realistically, we should get about 15 tcf,” the official said.

In mid-April, following a visit to the African nation, petroleum minister Dharmendra Pradhan had said that India was looking to invest the sum in addition to similar investments made by OVL first in 2013. Depending on profitability, the LNG would be sold either from India or Mozambique, Pradhan had said earlier.