ONGC’S KG basin gas field all set to touch peak in July

Resource Digest - - CONTENTS -

State-owned Oil and Nat­u­ral Gas Corp ex­pects to scale peak out­put of about 5 mil­lion stan­dard cu­bic me­ters per day from its Vashishta gas field in KG basin by July this year. Vashishta and S1 gas fields, lo­cated in the Kr­ishna-go­davari (KG) Off­shore Basin off the east coast of In­dia, be­gan op­er­a­tions in Septem­ber last year. "We are pro­duc­ing 1.1 mil­lion stan­dard cu­bic me­ters per day from the fields cur­rently and hope to reach about 5 mm­scmd by July," a se­nior com­pany of­fi­cial said.

The fields were de­vel­oped un­der a green­field deep­wa­ter de­vel­op­ment project at an in­vest­ment of $751.65 mil­lion.

The Vashishta field is es­ti­mated to pro­duce 9.56 bil­lion cu­bic me­tres (bcm) over a pe­riod of nine years with peak pro­duc­tion reach­ing 3.55 mil­lion met­ric stan­dard cu­bic me­tres a day (mm­scmd) dur­ing the first five years.

The S1 field is ex­pected to de­liver 6.22 bcm over a pe­riod of eight years with a peak pro­duc­tion of 2.2 mm­scmd for the first five years.

As part of the Vashishta and S1 field de­vel­op­ment, ONGC is drilling four wells and ship­ping the gas from them through a sub-sea pipeline to an on­shore ter­mi­nal at Odalarevu in Andhra Pradesh, he said.

The Vashishta field lies in wa­ter depths vary­ing be­tween 500 me­ters and 700 me­ters and about be­tween 31 km and 35 km from the Amala­pu­ram coast.

The S1 field is lo­cated in wa­ter depths of be­tween 250 me­ters and 600 me­ters, and ap­prox­i­mately be­tween 26 km and 29 km from the Amala­pu­ram coast. While the Vashishta field is a free gas field with es­ti­mated re­serves of 12.92 bcm, the S1 field lies to the east of G-1 field and is a free gas field with es­ti­mated re­serves of 10.37 bcm. The of­fi­cial said Vashishta is the first

field in the coun­try to get the pre­mium price of gas.

In March last year, the gov­ern­ment had al­lowed higher price for new gas pro­duc­tion from dif­fi­cul­ties ar­eas like deep sea, ul­tra deep­wa­ter and high pres­sure, high tem­per­a­ture ar­eas. When ONGC started pro­duc­tion, the pre­mium price was $6.61 per mil­lion Bri­tish ther­mal unit as against a cap price of $3.06 per mmbtu for reg­u­lar fields. "We got $6.61 per mmbtu for about a month," he said. The pre­mium price for pe­riod be­tween Oc­to­ber 2016 and March 2017 was cut to $5.3 per mmbtu based on bench­mark rates in gas sur­plus economies. The rate for reg­u­lar gas price also de­clined to $2.50 per mmbtu.

The of­fi­cial said the gas was sold to state gas util­ity GAIL. "We have pric­ing and mar­ket­ing free­dom and we will auc­tion the in­cre­men­tal pro­duc­tion. Whoso­ever pays us the best price, sub­ject to the gov­ern­ment pre­scribed ceil­ing, will get the gas," he added.


A com­mit­tee un­der the Min­istry of En­vi­ron­ment, Forests and Cli­mate Change has given a green sig­nal to Cairn In­dia for un­der­tak­ing drilling works of 64 ex­ploratory and ap­praisal wells in KG-OSN-2009/3 block in KG basin at Prakasam and Gun­tur dis­tricts of Andhra Pradesh.

The Ex­pert Ap­praisal Com­mit­tee (EAC) while ac­cord­ing to en­vi­ron­men­tal clear­ance set a few con­di­tions along with other spe­cific and gen­eral en­vi­ron­men­tal con­di­tions rel­e­vant to the project pro­posal.

Af­ter ex­am­in­ing the facts and de­tailed de­lib­er­a­tions, the com­mit­tee de­cided to rec­om­mend the pro­posal for grant of en­vi­ron­men­tal clear­ance sub­ject to com­pli­ance of fol­low­ing con­di­tions along with other spe­cific and gen­eral en­vi­ron­men­tal con­di­tions rel­e­vant to the project pro­posal, the EAC said in the min­utes of the meet­ing held re­cently.

Cairn In­dia Lim­ited has pro­posed for drilling of 55 ex­ploratory and 11 ap­praisal wells in KG-OSN-2009/3 block in Off­shore KG Basin. The off­shore block in the Bay of Ben­gal along the coast of Andhra Pradesh is spread over an area of about 1988 sq km. The block cov­ers partly the off­shore ar­eas of Prakasam and Gun­tur dis­tricts.

Cairn In­dia had ear­lier said it de­clared force ma­jeure of two of its oil and gas blocks in­clud­ing KG-OSN-2009/3 due to the ob­jec­tions raised by the Min­istry of De­fence for tak­ing up ex­ploratory works. How­ever, the com­pany, in 2014, got nec­es­sary clear­ance from the Min­istries con­cerned.

The block was awarded to Cairn In­dia on 30 June 2010 as part of the NELP-VIII round for ex­plo­ration of hy­dro­car­bons and pro­duc­tion. The com­pany has 100 per cent stake in the Block, ac­cord­ing to the last year’s an­nual re­port.

Ex­ploratory/ap­praisal drilling is car­ried out in the iden­ti­fied sub-sur­face struc­tures to find out if there is pres­ence of hy­dro­car­bons in com­mer­cially ex­ploitable quan­ti­ties, an ex­pert in oil and gas filed said.

Cairn In­dia shares were trad­ing at Rs 262.90 apiece on BSE down 2.01 per cent at 1400 hrs.


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