Mari Petroleum Company Limited (Mari) disclosed on yesterday that the Economic Coordination Committee (ECC) of the Cabinet had approved the proposal for dismantling of the company’s Gas Pricing Agreement (GPA) and its replacement with market related formula.
The company secretary at Mari, Assad Rabbani informed the stock exchanges that the broad parameters of the ECC’s approval for amendment in Mari GPA included the following: The present cost plus wellhead gas pricing formula to be replaced with a crude oil price linked formula in line with the formula allowed to Pakistan Petroleum Limited which provides a wellhead gas price of $2.17/mmbtu [as reference crude price (RCP) of $110/BBL] to be gradually achieved in five years starting from July 1, 2014.
“At the currently prevailing crude oil price of $85 a barrel, the resultant wellhead price would be $1.87/ mmbtu at RCP of $110 a barrel ($1.59/mmbtu at RCP of $85 a barrel) over a 10 year period.”
