ONGC Secures High-Value Projects and New Pricing for Gas Development

According to the guidelines for domestic gas pricing, domestic natural gas (APM Price) was set at 10% of the Indian Crude basket price, as announced monthly by the Petroleum Planning and Analysis Cell (PPAC).

For gas produced through well interventions or from new wells in ONGC or Oil India Limited’s nomination fields, a 20% premium over the APM price was applied, making it 12% of the Indian Crude basket price for new gas. The Directorate General of Hydrocarbons (DGH) was responsible for finalising the details, which needed approval from the Ministry of Petroleum and Natural Gas (MOP&NG).

Following the guidelines, the Ministry of Petroleum and Natural Gas (MOP&NG) has now announced that gas produced from new wells or well interventions in ONGC or Oil India Limited’s nominated fields will be priced at a 20% premium over the APM price.

The higher price for new gas will make new gas development projects more feasible and help ONGC increase natural gas production from challenging areas that need more capital and advanced technology. This will boost the company’s investment capacity for taking on expensive and risky development projects.

Recently, ONGC’s Board approved the Daman Upside Development project in Mumbai High at an estimated cost of around ₹7,800 crore. This project aims to boost domestic gas production, with a peak output expected to be about 5 MMSCMD. The project has already been awarded for execution.

The ONGC Board has also approved a new project for the Integrated Development of 4 contract areas under the DSF-II scheme, with an estimated cost of around ₹6,000 crore. This project is expected to produce about 4 MMSCMD of gas, and the Government of India has granted pricing and marketing freedom under the DSF Policy. The project has been awarded for execution. This policy decision supports India’s goal of increasing the share of natural gas from 6% to 15% by 2030.

About Oil and Natural Gas Corporation Ltd

As a Maharatna company, ONGC accounts for approximately 71% of the country’s domestic production. It is also the most profitable public sector undertaking (PSU) in India.

On August 12, 2024, Oil and Natural Gas Corporation Ltd’s share price opened at ₹332.75, touching the day’s high at ₹344.70, as of 02:51 PM on the NSE.

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