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Vedanta is aiming for a minimum of $9.5 for the gas from Rajasthan

Aug 23, 2023

By: BlinkX Research Team

Vedanta Ltd has set a minimum price of $9.5 for each million British thermal units (mmBtu) of natural gas produced from its Rajasthan block. This means that if someone wants to buy this gas, they must be willing to pay at least $9.5 for every unit of measurement called a million Btu. The company is looking for buyers who are interested in purchasing a quantity of 0.6 million standard cubic meters of gas every day.

In their bidding process, Vedanta has introduced a variable labeled 'P.' This variable represents an additional amount that potential buyers are willing to pay on top of 14.5% of the price of Brent crude oil. Brent crude oil is a benchmark for oil prices, so Vedanta is asking buyers to specify how much extra they are willing to pay based on the Brent crude oil price.

The price Vedanta is asking for its natural gas is almost 50% higher than the maximum price paid to state-owned gas producers. This indicates that Vedanta believes its gas is worth significantly more than what the government pays for similar products.

Vedanta is planning to conduct electronic bidding (e-bidding) for this gas on September 8. This means interested buyers will submit their bids electronically on this date.

This is the specific area where Vedanta is producing the gas. It's mainly known for its oil production, but it also contains gas resources. Vedanta owns a 70% stake in this block, while the state-owned Oil and Natural Gas Corporation (ONGC) owns the remaining 30%.

Vedanta has developed a terminal called the Raageshwari gas terminal to process and deliver the natural gas produced from the RJ block in Barmer. This gas is transported through a pipeline known as the Barmer-Pali pipeline, managed by GSPL India Gasnet Limited.

Source: Media Reports