CCEA allowed RIL Higher Gas Prices in Lieu of Bank Guarantee
The Cabinet Committee on Economic Affairs (CCEA) allowed Reliance Industries Ltd (RIL) to sell natural gas at the revised doubled price from April, 2014 provided the firm gave a bank guarantee.
The contractor would be allowed to sell D1 and D3 (fields) gas at revised prices from April 1, 2014. The sale would be permitted on the basis of a bank guarantee by RIL in favor of the government.
The bank guarantee (around $9 billion )will be encashed if it is proved that the company stored gas or deliberately put down production at the main Dhirubhai-1 and 3 (D1 and D3) fields in the eastern offshore KG-D6 block.
Note: The new gas pricing formula will be applicable to all producers and all forms of gas including Coal-Bed Methane (CBM) and shale gas.
Govt allowed CIL to pump gas from CBM mines
The Cabinet Committee on Economic Affairs (CCEA) allowed state-owned Coal India Ltd (CIL) to pump methane gas trapped in coal beds of its existing mines. This move will open a new revenue stream for the world’s largest coal miner and help unlock several mines that have remained out of bounds because of the presence of the explosive gas that make mining unsafe.
Presently, rules and regulations prohibit mining firms from extracting Coal Bed Methane (CBM) during mining as the policy does not allow for simultaneous extraction of methane (CBM) and coal. Only those companies that successfully bid for mines with CBM are allowed to explore and produce such gas. The government auctioned 33 CBM blocks since 2001.
CIL holds at least 20% of the estimated 60 billion tones of coal resources in India. It has many coal mines in eight States that are estimated to have CBM reserves of 3.5-4 trillion cubic feet.
Cabinet approved FTA in trade and services with ASEAN
The Cabinet approved a Free Trade Agreement (FTA) in trade and services with the Association of Southeast Asian Nations (ASEAN).
Objective: To promote the movement of Indian professionals in the 10-nation ASEAN. The Agreement on Investment would protect, promote and increase foreign investment flows into the country and also removes and barriers.
Note: The Comprehensive Economic Cooperation (CECA) between India and ASEAN was signed in 2003. The Cabinet approved the Agreement on Trade Goods under the CECA with the ASEAN in July 2009.
First Ministerial Level Talk held for BCIM Trade Corridor
India, China, Bangladesh and Myanmar held the first ever official-level discussions on the ambitious BCIM economic corridor to link India and China with Bangladesh and Myanmar.
The economic advantages of the BCIM trade corridor are:-
Approach to numerous markets in Southeast Asia,
Improvement of transportation infrastructure and
Creation of industrial zones
Currently, the four nations raised an ambitious proposal that included developing multi-modal transport, such as road, rail, waterways and airways, joint power projects, telecommunication networks, etc. As a first step, they will identify realistic and achievable infrastructure projects to boost physical connectivity.
Over the next six months, each country will come up with a joint study report proposing concrete projects and financing modalities, before the next meeting of the four nations in June 2014, hosted by Bangladesh.
The linking of all four countries by road has strengthen the belief that this corridor would subsequently open up the whole of the northeastern region of India to Southeast Asia and China and turn it into a significant channel of trade.
BCIM Trade Corridor
The Bangladesh-China-India-Myanmar (BCIM) economic corridor is a test case for cooperation between India and China in regional development as well as addressing common challenges. It aims to connect Kolkata with China’s Kunming city with a highway running through Bangladesh and Myanmar.
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