The Hindu Business Line : ONGC likely to begin production from KG Basin in 2012

Venture plans: Dr U.D. Choubey (left), Chairman and Managing Director, GAIL, and Mr R.S. Sharma, Chairman and Managing Director, ONGC, at meeting in the Capital on Tuesday.

Our Bureau

New Delhi, July 24 ONGC is targeting 2012 as the year to begin production from its Krishna Godavari Block off the east coast. “We estimate an initial output of 12 million cubic metre per day (mcmd) from the KG-DWN-98/2 block in 2012,” said Mr R.S. Sharma, Chairman and Managing Director ONGC. ONGC’s KG block is close to Reliance Industries Ltd’s (RIL) prolific D6 block, which is expected to begin production in the middle of next year.

Mr Sharma was speaking to the newspersons at the signing of the memorandum of understanding between ONGC and GAIL (India) Ltd for gas transportation and marketing. ONGC has signed an agreement with GAIL for monetising of the reserves, he said.

“The 12 mcmd is only a preliminary estimate of initial output and actual production can be higher,” Mr Sharma said.

“We have got an appraisal done of the discovery made in UD1 well of the block by two independent domain experts – Schlumberger and WesternGeco – and will submit the report to the Directorate-General of Hydrocarbons next month. Once the DGH approves of it, we will file a development plan for bringing the discoveries to production,” he added.

ONGC is targeting 2008 for submitting the development. Mr Sharma declined to disclose the total reserves in the block.

ONGC has six discoveries in the block, the largest being the December 2006 find that is estimated to hold an in-place reserve of 2.09 trillion cubic feet (tcf). The company has entered into collaboration with Norsk Hydro of Norway and Petrobras of Brazil to bring them as equity partners in the block for the development of the finds.

As regards the Mahanadi basin find, Mr Sharma said, the recent gas discovery was not commercial on a standalone basis and the less than one trillion cubic feet reserves in that would have to be clubbed with other finds beginning production.

Transportation

ONGC Director (Business Development), Mr A.K. Balyan, and GAIL’s Director (Business Development), Mr A.K. Purwaha, inked an MoU for formation of a joint venture for transportation and marketing of the gas not only from the KG basin block but also from ONGC’s Mahanadi basin find. Speaking at the occasion, Dr U.D. Choubey, Chairman and Managing Director, GAIL said, “We may also look at opportunities for setting up of city gas distribution networks for supply of CNG to automobiles and piped gas to households and commercial established for cooking purpose.”

Trans-Saharan pipeline

GAIL (India) Ltd is keen on joining the $13-billion Trans-Saharan gas pipeline that is to supply gas from Africa to the European market. Dr Choubey said, “We have evinced interest and are keen to participate in the project.”

The proposed 4,300-km line would transport gas from the Niger Delta in southern Nigeria through Niger and into Algeria and Europe. “We being primarily gas transportation and marketing company, we see a lot of synergy in participation in the transnational project,” he said.

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