Press Releases

PMT Gas Supplies
GAIL (India) Limited
(New Delhi, February 22, 2006.)

New Delhi, February 22, 2006.Recent statements made by one of the partners of the Panna-Mukta-Tapti (PMT) JV regarding the PMT gas supplies are factually incorrect. The facts are as follows :

Under the Article 21 of the Production Sharing Contract (PSC) entered in 1994 between the PMT JV consortium and the Government of India (GoI), the natural gas produced from the PMT fields shall first be offered to the Government of India or its Nominee and in January 1995, the Government of India nominated GAIL as its nominee for the purchase of natural gas from the PMT fields.

Currently, GAIL is purchasing about 6 MMSCMD of the PMT gas, as the Government of India nominee for supplying this entire quantity to 10 Power and Fertiliser consumers, including NPTC, NFL, Pragati Power and others. It is important to mention that GAIL is supplying this 6 MMSCMD of the PMT gas at APM price and is not charging a single cent, as contended by way of marketing margin.

In November 2005, the Government of India has communicated to the PMT JV, followed by another reminder in February 2006, for extension of supplies of 6 MMSCMD of gas to GAIL beyond 31.03.2006 on the same broad terms. Accordingly, GAIL and the PMT JV are discussing the terms of purchase of the PMT gas for the period beyond 31st March 2006. It may be of interest to the direct customers of the PMT JV to know that on the sale of 4.8 MMSCMD of PMT gas to them, it is the JV consortium which is charging a marketing margin of 22 cents / mmbtu to them, about 10 cents / mmbtu more than the marketing margin charged by GAIL to its non APM customers.

The above clarification is necessitated by some incorrect observations made by one of the JV partners on strictly commercial issues.