Defense Minister A K Antony to head EGoM on natural gas and allocation

Defense Minister A K Antony will now head the reconstituted Empowered Group of Ministers (EGoM) on natural gas and allocation, which will decide if the price of natural gas produced by Reliance Industries (RIL) from KG-D6 fields can be revised before 2014. Antony, who was not a part of the EGoM, has been included following Pranab Mukherjee’s resignation from finance ministry for contesting in Presidential election. Minister of State for Finance, Namo Narain Meena on the EGoM will be representing the finance ministry.

RIL has demanded a market price of KG-D6 gas instead of $4.205 per million British thermal unit rate, which was fixed for five years ending March 31, 2014. The company began its output from KG-D6 by April 1, 2009 and it has seen output halve to less than 30 million standard cubic meters per day in past two years. Now the company seeks market price, which will help it to deploy deep sea technologies to exploit difficult sections of the reservoir.

India imports liquefied natural gas (LNG) at three times the price fixed for KG-D6 gas and RIL is seeking that price for the eastern offshore fields. The Oil Ministry is, however, opposed to any revision in rates before timeline is fixed by the EGoM.

Apart from the two ministers, the EGoM also includes Petroleum Minister, Jaipal Reddy, Power Minister, Sushil Kumar Shinde, Fertiliser and Chemicals Minister, M K Alagiri, Law and Justice Minister, Salman Khurshid and Planning Commission deputy chairman, Montek Singh Ahluwalia.