| Naik: Freedom call
Mumbai, June 18: The Cabinet will consider the de-regulation of natural gas prices next month, said minister for petroleum and natural gas, Ram Naik.
The minister told a gas industry conference organised by Gail (India) here today that a group of ministers formed by Prime Minister Atal Bihari Vajpayee to look into the issue will finalise its report by the month-end. It will then be sent to the Cabinet for approval.
The proposal to de-control natural gas prices was put off late last year after objections from sections of the government, which felt lifting controls would hit the power and fertiliser sectors — the key user-industries. It is also felt that state electricity boards (SEBs), most of which are in a financial funk, will not be in a position to work the gas price increase into their tariffs.
Naik said Gail (India) has discovered oil and gas in an onshore block near Ahmedabad. The quantum of reserves in the block, which is operated by Gujarat State Petroleum Corporation (GSPC) with a 50 per cent stake, will be known in the next four to five weeks. “So far, only the first well has been drilled,” the minister said.
Gail (India) chairman and managing director Proshanto Banerjee said three gas-bearing zones have already have been found while drilling to 1,736 meters since the discovery was made last week. The target depth of one of the seven wells in the block is 1,800 metres. An elaborate production test will be carried out soon. The first phase will cost around $ 6.6 million.
The announcement fired up Gail on bourses. Opening at Rs 105, the stock flared up to an intra-day high of Rs 116.50, before ending the session at Rs 113.35.
Gail plans to lay a Rs 616-crore Dahej-Uran-Pune pipeline to supply LNG from Petronet’s terminal in Gujarat.
Naik said the Dahej-Uran stretch would be completed in the first phase, by September 2004, while the link between Uran and Pune should be in place by 2005.
The gas, which would be a part of five million tonnes of LNG that Petronet will import from Qatar, would be sold to industries in Mumbai, Pune and Thane.