India’s Reliance suspends latest east coast gas auction

By Nidhi Verma and Sarita Chaganti Singh

NEW DELHI (Reuters) – India’s Reliance Industries Ltd and a local unit of BP on Monday suspended an auction for gas from their deepwater block on the east coast following changes to the country’s gas marketing rules, the pair said in a notice.

India last week revised marketing rules for gas produced from deepwater fields that are difficult to explore, including capping the trading margin on such sales.

Reliance did not respond to Reuters request for comment. A source said Reliance would revise the terms of auction process after the latest changes to the rules.

Reliance and its partner BP Exploration (Alpha) Ltd (BPEAL) operate the KG D6 deepwater block in the Krishna Godavari basin and were seeking bids for the sale of 6 million cubic meters a day (mmscmd) of gas.

“It is hereby notified that the current bidding process is suspended till further notice,” the two companies said in a notice issued on Monday and seen by Reuters, confirming earlier information from industry sources.

The new rules, which aim to produce a range of bids, also prioritse the sale of gas for households and the transport sector, followed by fertilisers, cooking gas and power, in the event that similar offers are made.

(Reporting by Nidhi Verma and Sarita Chaganti Singh; Editing by Toby Chopra, Kirsten Donovan)