Niko Resources saidi in a statement that press reports in India are indicating that the Cabinet Committee of Economic Affairs (CCEA) of the Government of India has approved a new pricing formula for domestic gas sales in India. The pricing formula is based on the average of the prices of imported LNG into India and the weighted average of gas prices in North America, Europe and Japan.
For the D6 Block in India, the pricing formula will be effective on April 1, 2014 upon expiry of the current gas sales contracts on March 31, 2014. Based on information provided in the press, the gas price as at April 1, 2014 will be around $8.40 / MMbtu, double the price of $4.20 / MMbtu for current gas sales from the D6 Block, and prices are expected to be revised quarterly using the approved formula.
Details of the CCEA decision are expected to be released in the next few days.