assured purchase (guaranteed offtake)

Assured purchase is a long-term contractual commitment by an Oil Marketing Company to buy the entire CBG output of a SATAT-registered plant at a predetermined base price for a defined period — typically 10-15 years. It is the single most important commercial feature of SATAT and the reason the scheme has succeeded in attracting private capital where earlier biogas programmes failed.

The mechanics work in three steps. First, the developer registers under SATAT through the OMC's online portal, submits a Detailed Project Report and gets a Letter of Intent reserving offtake against a specific geographic delivery location and capacity. Second, on commissioning the plant the developer signs the long-term offtake agreement that fixes the base price (currently around ₹54-55 per kg of CBG at 50 MJ/kg, with a defined escalation formula or periodic revision clause). Third, the developer delivers gas in cascade tankers or injects it into the OMC's CGD network on a notified schedule, with quality acceptance at the OMC's gate against IS 16087:2016. Invoicing is monthly and payment lands within 15-30 days subject to quality clearance.

Assured purchase removes two of the three big risks that have historically killed biogas projects in India. Market risk — finding a buyer at a workable price — is eliminated for the contract tenor. Price risk — fluctuations that destroy plant economics — is bounded by the SATAT formula. What remains is operational risk: feedstock availability, plant uptime, and quality compliance. This single concentration of risk is what makes the project assessable by lenders and predictable for promoters.

The trade-offs are worth flagging. The assured price is below spot CNG benchmarks during periods of high gas prices, capping upside. Offtake is conditioned on quality conformance — a plant producing 88% methane CBG cannot sell it under SATAT and must find an industrial buyer at a discount. Lift-or-pay protections vary by OMC contract; some are weak, leaving plants exposed to OMC scheduling delays. And the assured purchase is to a single OMC counterparty, so an OMC-side dispute can halt a producer's entire revenue stream for months. Negotiating multi-OMC LOIs where geography allows, and building 7-10 days of cascade storage as a buffer, are prudent mitigants.