Press Releases

Press Release
[New Delhi, 29th march, 2006]

GAIL-PMT JV ink term sheet for PMT gas supplies

GAIL, today, signed a term sheet with Panna-Mukta Tapti JV (PMT JV) for gas supplies from the PMT fields commencing 1st April 2006. Pursuant to recent negotiations, GAIL will be receiving about 5 MMSCMD of gas from the PMT JV at purchase price of USD 4.75/MMBTU, from 1st April 2006 for a period of two years i.e. till 31st March 2008. This price is inclusive of the Royalty that is payable by the PMT JV to Government of India. The term sheet was signed by Shri R. Suresh, Executive Director (Marketing), GAIL (India) Ltd., Shri Y.P. Ajmani, Vice President (Petroleum), RIL; Shri Kapil Garg Managing Director, British Gas Exploration & Production India Ltd (BGEPIL) and Shri S. Vasudeva, Group General Manager JV (PSC), ONGC

As per the provisions of the term sheet, the additional gas available after meeting the PMT JV contractual obligations including that of GAIL, will be supplied to GAIL at USD 4.75/MMBTU on best endeavor basis. The term sheet provides for terms and conditions as generally found in gas sales contracts, including payment terms, quality, force majeure etc

Gas from the PMT fields will be further supplied to the power and fertilizer sector customers who have been receiving gas supplies from GAIL for many years in the past. Last year, MoPNG had directed that 6 MMSCMD of gas from PMT fields will be supplied to power and fertilizer customers @ USD 3.86/MMBTU commencing April 2005, while the JV was free to directly market the remaining volume of PMT gas to its own customers. MoPNG had also directed the review of this arrangement after the completion of one year

Government of India and the PMT consortium/JV executed Production Sharing Contracts (PSCs) in 1994 for Panna-Mukta and Tapti fields. Actual consortium consisted of ONGC, RIL and Enron with participating interest of 40%, 30% and 30% respectively; with BGEPIL subsequently taking over Enron’s share. Pursuant to these PSCs, GAIL has been receiving gas supplies from these fields, as a Government Nominee from 1997 onwards. Presently, these two fields jointly produce about 10 MMSCMD of gas

PMT JV has contractual obligation of supplying about 4.8 MMSCMD to its own customers (Other than GAIL) Ex-Hazira at the selling price of USD 4.08/MMBTU, including marketing charges. The PMT JV term sheet with its direct customers commenced on April 1st 2005 and is valid till 31st March 2008