The state-owned Oil and Natural Gas Corporation (ONGC) and billionaire Mukesh Ambani's Reliance Industries Ltd. are bidding separately on natural gas extracted from coal seams at prices linked to the price of Brent crude oil. According to tender documents, Reliance wants to pay at least USD 12.75 per million British thermal unit for coal bed methane (CBM) from a block in the Shahdol district of Madhya Pradesh, while ONGC wants to pay USD 9.35 for the same fuel from North Karanpura in Jharkhand. According to the tender document, Reliance has sought bids for the sale of 0.65 million standard cubic meters per day from CBM block SP(West)-CBM-2001/1 for a year beginning April 1, 2023. Bidders were required to provide a percentage of the current Brent crude oil price for a variable called v. The starting bid price has been maintained at 15% of Brent ('v' = 15%). This amounts to a price of USD 12.75 per mmBtu at the current Brent price of USD 85 per barrel. On February 24, e-bidding will begin. For the past three years, ONGC has offered 0.015 mmscmd of gas from the North Karanpura (NK) block in Jharkhand. Bidders were required to specify a premium, or p, as a percentage of the Brent price. The reserve or bid start price has been maintained at 11 per cent of the Dated Brent price, or USD 9.35 per mmBtu at the USD 85 per barrel Brent oil price.The ONGC statement stated that the price of gas shall be higher of the reserve gas price plus quoted premium (p) or floor price plus quoted premium (p). The domestic gas price, which is currently USD 8.57 per mmBtu, will be lower than the floor price by USD 1 per mmBtu. It stated that the e-auction of ONGC gas would take place on March 2. CBM is a novel type of natural gas that can be found in coal seams or deposits. Similar to natural gas, it can be utilized for methanol production, electricity production, fertiliser feedstock, rolling mills, steel plants, and other industrial applications. It can also be compressed into CNG and used as a fuel in automobiles, or it can be piped to kitchens or homes for cooking. The pricing of gas from coal seams, or CBM, is free or determined by the market, whereas the government sets the price of natural gas from conventional fields every six months. In the most recent tender, ONGC is seeking a lower minimum price than it did last year for CBM from a Bokaro block in Jharkhand. According to the sale tender, ONGC invited bids for the sale of 0.20 mmscmd in June 2022 at a reserve or floor price of 14% of the Dated Brent crude oil price and USD 1 per million British thermal unit. Bidders will be required to specify a price premium over the reserve price.A USD 1 mark-up per mmBtu was added to the government-mandated domestic natural gas price for the floor price. Contract Gas price shall be the higher of USD 1 per mmBtu plus 'P' (the biddable parameter) or 14 per cent of Dated Brent Price, or the starting price, it had mentioned. In that tender, the reserve gas price came to USD 12.9 per mmBtu at the current Brent crude oil price of USD 85 per barrel. Reliance sold CBM gas from the Madhya Pradesh block to companies like GAIL, GSPC, and Shell in March of last year at a significant premium. Reliance paid USD 8.28 more for 0.65 mmscmd of gas from block SP-(West)-CBM-2001/1 than the current Brent crude oil price. The company had sought bids above the base price of 13.2 per cent for Brent crude oil.The base price was USD 15.18 per mmBtu based on the Brent crude oil price of USD 115 per barrel at the time, and after adding the USD 8.28 premium bid by the state-owned gas utility GAIL and other businesses, the final price was USD 23.46 per mmBtu.