New Delhi, March 29: GAIL (India) today signed a term agreement with Panna-Mukta-Tapti joint venture (PMT JV) for gas supplies from the PMT fields.

The gas supply will commence from April 1 next year.

Under the pact, GAIL will receive about 5 mmscmd of gas from the joint venture at a price of $4.75 per million Btu for two years. This price, however, includes the royalty payable by PMT JV to the Centre.

The agreement also provides that excess gas available after meeting the contractual obligations including that of GAIL could be supplied to the public sector company at $4.75 per million Btu “on best endeavour basis”.

Last year, the ministry of petroleum and natural gas had said that 6 mmscmd of gas from PMT fields would be supplied to power and fertiliser plants for $3.86 per million Btu beginning April 2005, while the joint venture was free to directly market the remaining gas to its preferred customers.

The gas from the PMT fields will be supplied to power and fertiliser companies who have been receiving supplies from GAIL for many years now.

The central government and the PMT consortium had signed production sharing contracts (PSCs) in 1994 for the ONGC-discovered Panna-Mukta and Tapti fields.

The original consortium comprised ONGC, Reliance Industries and Enron having 40 per cent , 30 per cent and 30 per cent shareholding, respectively. British Gas subsequently bought out Enron’s stake.

Pursuant to these PSCs, GAIL has been receiving gas supplies from these fields as a government nominee from 1997 onwards. Currently, the two fields together produce about 10 mmscmd of gas.

Panna-Mukta-Tapi joint venture also has a contractual obligation of supplying about 4.8 mmscmd gas to its own customers, besides GAIL, at a selling price of $4.08 per million btu, including marketing charges.

The term of agreement with its direct customers is effective from April 1, 2005 to March 31, 2008.