Reliance Industries Ltd.

Mukesh Ambani owned Reliance Industries (RIL) is likely to sell coal bed methane (CBM) at a price of atleast $10 a unit. The company’s target of double digit CBM gas price is calculated after the elimination of ineligible bidders such as companies related to Reliance, consumers offering very high price for very small quantities and certain fertilizer firms, which offered negative bids.

Much to the company’s delight, the oil ministry this time approved the price discovery mechanism of the company as the ministry felt that the company has followed correct procedure of inviting bids on an arm’s length basis, however, the issue is yet to be scrutinized by the directorate general of hydrocarbons.

Reliance had first submitted pricing basis in September last year for the approval of the oil ministry, which the oil ministry rejected saying that bids were invited from limited number of customers. RIL again on February 21, 2012 submitted another proposal to the ministry on following an open bidding process.

Further, the company is expected to produce 3.5 million metric standard cubic metres a day of methane gas from its blocks in Madhya Pradesh (MP).