Cairn allowed to sell gas to 3rd party

The law ministry has endorsed the energy ministry's proposal to allow Cairn, the operator of Sangu Gas field, to sell its gas to any third party within the country.
“We are set to sign a contract with the Cairn, the British oil and gas company, today (Sunday) thus it could collect rig by December to go for drilling in South Sangu to tap 30 to 50 mmcf gas”, a Petrobangla official told BSS yesterday.
Earlier, the company informed Petrobangla to sign contract within June 30 otherwise it would not be able to go for drilling any appraisal well at South Sangu this winter.
Energy ministry approved the UK-based Cairn Energy for selling gas to a third party in August last year other than Petrobangla produced from Magnama and Hatiya. Cairn completed the 3D seismic survey there although it will take some time more for analysing the data.
“Through this tapping the Sangu gas field would get life for next one and half year”, energy ministry official said.
Petrobangla's PSC cell said as per condition Cairn has to submit a report to Petrobangla where it will give every details of the sale agreement between the third party and Cairn, including the gas price.
And if Petrobangla agrees to buy the gas as per proposed price than Cairn would have to sell gas to it. Petrobangla, however, will get 30 days to take its decision in this regard.
According to PSC, Cairn is selling gas to Petrobangla at a price of US dollar 2.9 for 1,000 cubic feet (Mcf), following the approval it could fix its rate as per negotiation.
“As per amendment, we (Petrobangla) will get same benefit as they will get higher price, it would be calculated by the accounts department”, a top official said. However, for the first time the government recommended any foreign company to sell gas to the private sector. At present all the international oil companies in operations are selling gas to Petrobangla only.
“Cairn will be allowed to sell only their portion of gas to a third party as per the production sharing contract (PSC) for block 16,” Petrobangla official added.
The Cairn official said if there is any availability, the gas production from Magnama and Hatiya structures would be possible by next three and a half years. “A US$ 40 to 50 million would be required to implement the plan to tap pocket gases of south Sangu”, the official said.