Context:

The Government gave a nod to major reforms in the marketing of Natural Gas in the country, taking another significant step to move towards a gas-based economy.

Key-highlights of the Policy

• Standard Procedure:
  • To prescribe the standard procedure to discover the market price of gas to be sold in the market by gas producers, through a transparent and competitive process,
  • Permit Affiliates to participate in the bidding process for the sale of gas and allow marketing freedom to certain Field Development Plans (FDPs) where Production Sharing Contracts already provide pricing freedom.

Transparent Bidding Process:

• To provide a standard procedure for the sale of natural gas in a transparent and competitive manner to discover market price by issuing guidelines for sale by contractors through e-bidding.
• Rebidding will have to be done in case only affiliates participate, and there are no other bidders.

Freedom to FDPs

The policy will also grant marketing freedom to the Field Development Plans (FDPs) of those Blocks in which Production Sharing Contracts already provide pricing freedom.

About Natural Gas

• Natural gas contains many different compounds.
  • The largest component of natural gas is methane (CH4 )
  • Natural gas also contains smaller amounts of natural gas liquids (NGL, which are also hydrocarbon gas liquids), and nonhydrocarbon gases, such as carbon dioxide and water vapor.
  • Natural gas is used as a fuel and as a feedstock, with demand largely dependent on fertilizer industry (28%), power (23%), city gas distribution entities (16%), refinery (12%), and petrochemicals (8%) industries.

The Ministry of Petroleum & Natural Gas is entrusted with the responsibility of exploration and production of natural gas, their distribution, and marketing, import, export, and conservation of Liquified Natural Gas.