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Gujarat State Petroleum Corporation (GSPC) will start drilling to develop the KG-8 gas discovery at the Western part of the KG-OSN-2001/3 offshore block (now renamed as Deendayal) next week.
The Directorate-General of Hydrocarbons (DGH) approved the field development plan in November 2009. The Gujarat State PSU holds 80 per cent operating stake in the block. Other members of the consortium are GeoGlobal and Jubilant Enpro.
The estimated $1.7-billion project aims to produce 5.7-8.6 million standard cubic metre of natural gas a day (mscmd) from 15 production wells to be drilled in five years. According to a senior company official, gas will start flowing from the block by mid-2013.
“We have completed construction of the well head platform on May 18 and the drilling of the first production well will commence from the next week,” the official said. The capital expenditure towards the project during this fiscal is pegged at Rs 3,500 crore.
Integrating discoveries
Meanwhile, the regulator has asked the company to submit a comprehensive declaration of commerciality (DoC) combing all three major finds (KG-8 , 15 and 23) in different parts of the block within 30 months ending September 2012.
Of the three KG-15 is in the Eastern part of the block, which reportedly has “much higher in-place-reserve” than the western part which is being developed at present . The company previously lined up an appraisal drilling plan in Eastern part of Deendayal to substantiate commerciality of the discovery.
“We are already creating excess onshore (Kakinada in Andha Pradesh) and offshore processing capacities. DGH's recommendation to prepare an integrated plan will therefore help us plan a much larger production volume,” he said.
Area Extension
In addition, GSPC has also approached the regulator with a plea to allocate an area contiguous to the KG block. “This area falls between us and ONGC and is bigger in size than the Western part of Deendayal which we are developing now.
“The regulator has already allocated a share from the same to ONGC. We are hopeful that the rest of the area be allotted to us,” the official said.
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