At the close of offer on February 17, RIL received over 70 bids totalling a demand of more than 90 million standard cubic meters per day, several times more than the peak output of 3.5 mmscmd that the company plans to produce from Sohagpur block in Madhya Pradesh by 2014-end, industry sources said.

The company had on February 3 sought a price of 12.67 per cent of JCC, or Japan Customs-Cleared Crude, plus USD 0.26, plus 'V', where 'V' was the biddable number that users were asked to quote. 'V' could be positive or negative.

The formula is the same at which Petronet LNG Ltd, the nation's largest liquefied natural gas importer, buys 7.5 million tonne per annum of LNG from RasGas of Qatar. RasGas charges 12.67 per cent of JCC and Petronet pays a further USD 0.26 per mmBtu for shipping the gas in its liquid form (LNG) from Qatar.

Sources said RIL got a highest bid of a positive 1.5 for 'v' while Rashtriya Chemical and fertiliser (RCF) bid the a negative 15 for 'v'.

At USD 100 a barrel oil price, the CBM will cost USD 14.43 per million British thermal unit (12.67 + 0.26 + 1.5).

But at the price bid by RCF, RIL will have to pay USD 2.07 per mmBtu besides selling gas for free (12.67 + 0.26 - 15), they said.

While fertiliser companies bid a negative 'v', there was enough demand to at a minimum of a positive 0.1 for 'v' to sell all of the 3.5 mmscmd of Sohagpur gas.

If the government accepts this, RIL will get USD 13.03 per mmBtu for the coal-bed methane (CBM) gas.

The price will be higher than USD 4.205 per mmBtu rate fixed for natural gas produced from RIL's Krishna-Godavari Basin D6 fields for five years ending March, 31, 2014.

Great Eastern Energy Corp (GEECL) sells CBM produced from its Raniganj block in West Bengal at USD 6.79 per mmBtu while Essar Oil has proposed a rate of USD 4.20 per mmBtu for CBM it plans to produce in the same state.