RIL and ONGC join hands to share in­fra­struc­ture

Chemical Industry Digest - - News & Views -

Af­ter

months of tough ne­go­ti­a­tions, the Direc­torateGen­eral of Hy­dro­car­bons (DGH) has clinched a ‘mar­riage of con­ve­nience’ be­tween two arch ri­vals of In­dia’s oil and gas ex­plo­ration busi­ness —ONGC and Re­liance In­dus­tries Ltd (RIL).

With this agree­ment, RIL and its part­ner BP Plc, will be able to trans­port gas from their newer fields in Kr­ishna Go­davari Basin (KG-D6) block us­ing a sub-sea pipe­line pass­ing through edges of ONGC’s block in the neigh­bour­hood.

Atanu Chakraborty, Di­rec­tor-Gen­eral, DGH, said, “The need for hav­ing such a mech­a­nism was felt more when we went for Dis­cov­ered Small Fields auc­tion round. Joint use of in­fra­struc­ture — whether the player is from pub­lic sec­tor or pri­vate sec­tor — is ben­e­fi­cial for all.”

In­ter­est­ingly, few years ago, the two com­pa­nies had en­tered into a mem­o­ran­dum of un­der­stand­ing (MoU) to ex­plore the pos­si­bil­ity of shar­ing in­fra­struc­ture on the East Coast of the coun­try. The urge to bring the two ri­vals on board was be­cause of Naren­dra Modi set­ting a tar­get for the Min­istry for Petroleum & Nat­u­ral Gas to re­duce im­port de­pen­dence by 10 per cent by 2022. Se­condly, from these fields RIL and its part­ner ex­pect to start pro­duc­tion by 2020-21 with peak out­put ex­pected to be about 15-20 mil­lion stan­dard cu­bic me­tres a day.

The con­cept of in­fra­struc­ture-shar­ing is very com­mon among in­ter­na­tional play­ers in oil and gas ex­plo­ration and pro­duc­tion busi­ness, as it brings down cost. In In­dia, it has been ar­bi­trary and also leads to du­pli­ca­tion of fa­cil­i­ties as each would like to cre­ate their own in­fra­struc­ture.

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