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ECC approves gas pricing criteria of marginal gas fields – Alfalah Securities Limited

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by February 7, 2013 Brokerage

Karachi, February 07, 2013 (PPI-OT): Economic Coordination Committee (ECC) of the Cabinet has approved the gas pricing criteria for marginal gas fields.

According to Alfalah Securities Limited, as per the approved criteria, an additional premium of USD 0.25 / mmbtu will be offered on the 3 zones as defined in Exploration and Production Policy 2012.

Marginal gas fields are those oil and gas reservoirs that are not economically viable to be exploited under the existing exploration and production policies, pricing structure and available technologies.

The Price so determined for the Marginal gas fields will be referred to as “Base Price” will be allowed for pipeline specification. The government shall have the first right to purchase pipelines specification gas from the Marginal Gas Fields at a price to be determined in accordance with the policy where it shall exercise this right within 90 days from the date of application for declaration of a Marginal Gas Field beyond which the E and P Company will be free to sell the gas to the third party at negotiated rates either through pipeline or virtual pipeline. The windfall levy above the base price will be applicable to extent of 50% on the difference between the applicable base price arid the 3rd party sale price for the sale of gas from Marginal gas field to third parties and all the benefits of windfall levy may be equally divided between the Federal Government and concerned Provincial Government. The decision is taken to utilize every available option to lower the gas supply shortfall in the country which would be positive for the overall economy.

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