ONGC Expects Government Approval to use the Surplus Production From Legacy Fields

ONGC has put forward a proposal to the government requesting authorization for its petrochemical division, ONGC Petro Additions (OPAL), to utilize the surplus gas expected to be produced from its legacy fields. The government regulates the pricing for natural gas from these fields, having set a price range of USD 4-6.5 per million British thermal units (mmbtu) in April. The distribution of gas from these fields is prioritized across various industries by the government.

Under the newly implemented policy, producers are entitled to a 20 percent premium over the standard rate for any production that exceeds the baseline output from these fields. ONGC's proposition involves using this additional production internally, specifically within OPAL. The proposal is pending, awaiting the Union Cabinet's approval.

According to the article by Procurement Resource, ONGC has proposed to the government for its petrochemical arm, OPAL, to use extra gas from its traditional fields, where output prices are government-regulated, typically between USD 4-6.5 per mmbtu. The new policy allows a 20% premium on increased production from these fields. ONGC's request, which needs Union Cabinet approval, aims to channel this additional gas internally to OPAL.