ONGC to sell gas to GAIL for 15 years

New Delhi, July 7: Exploration and production giant, ONGC today signed a gas sales agreement for selling 50 million cubic metres of gas (MSCM) per day for a period of 15 years, with state owned Gas Authority of India Limited (GAIL).

Under the Gas Supply Agreement (GSA), the price of gas will be determined by the government gas pricing order.

''It is a binding agreement for 15 years. We have a take or pay agreement. If we don't take, we pay 90 per cent of the committed amount,'' GAIL Chairman Proshanto Banerjee said here after signing of the agreement between the two state owned corporates.

The government has fixed the administered price mechanism (APM) gas price at 1.75 dollars per million metric British thermal units (MMBTU). The price sold by private players is more expensive at 4.75 dollars per mmbtu.

UNI