Gail Chosen For Vedanta’s Barmer Gas Output Buy



The Centre has nominated state-run GAIL to buy the gas output from Vedanta’s prolific Barmer block, which has recently begun pumping the energy resource after accounting for a fourth of India’s domestic crude oil production.

The block, which would produce up to 4 million metric standard cubic meters a day (mmscmd), must sell the output to an entity chosen by the government. The production sharing contract for the Barmer block gives the producer pricing freedom but not marketing freedom but not marketing freedom. A long-drawn negotiation between GAIL and Vedanta hasn’t yet yielded an agreement, underscoring how hard it can be to settle on a rate in the absence of a widely acceptable domestic-market benchmark.


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