New Delhi, April 26
THE three-way joint venture by British Gas, ONGC and Reliance Industries Ltd that operates the Panna, Mukta and Tapti gas fields on Tuesday announced an investment plan of $500 million for the development and expansion of the Tapti gas field, offshore Mumbai.
The joint venture has made total commitment of over $900 million in the project, to be done in phases.
"This investment is out of the total investment committed by joint venture partners in the project," Mr Nigel Shaw, CEO, BG India, said.
Mr Shaw said, "The Government has approved the plan for the development of the mid-Tapti field with installation of a processing platform and new compression facilities to increase production in 2007."
Speaking to a select media gathering, Mr Shaw said a single wellhead platform will be installed to drill eight new wells to raise gas production from 250 million standard cubic feet per day (mmscfd) to 450 mmscfd.
"This will significantly increase production from the Tapti field and bring to market much needed gas supplies. The field has been performing robustly since we increased production in November last year with new compression facilities," he said.
Further, a new 20-inch export pipeline will be laid; in the initial stage, four wells will be drilled.
Regarding GAIL (India) Ltd not keeping its commitment of picking up its market quantity from the joint venture operator, Mr Shaw said, "The issue has been sorted out. Besides, from April 1 this year, the partners were given the right to directly sell gas from Tapti and the associated Panna/Mukta contract areas into the market place. This would strengthen India's gas industry in moving to a more liberalised regime where market-driven prices are derived."
Of the total production of 10.8 million standard cubic metres of gas per day (mscmpd) from the three gas fields on the western offshore, the joint venture will directly sell 4.8 mscmpd at a competitive price, which is expected to be $4.08 per million British thermal units (mBtu). The remaining six mmscmpd are to be sold to GAIL (India) Ltd at $3.86 per mBtu.
Earlier, the joint venture sold its entire gas output to GAIL at a price of $3.11 per mBtu. However, GAIL was not lifting the entire quantity marked for the company.
As per the understanding, GAIL is expected to pick up the marked quantity and then supply the gas to fertiliser and power plants through the Hazira-Bijaipur-Jagdishpura pipeline.
Recently, the consortium tied up with Gujarat State Petroleum Corporation Ltd, Gujarat Gas Corporation Ltd, Indian Petro Chemical Corporation Ltd and Reliance for direct sale of PMT gas at $4.08 per mBtu.