ONGC plans to invest $10 bn in gas discoveries

ONGC plans to invest $10 bn in gas discoveries

New Delhi: State-owned Oil and Natural Gas Corporation plans to invest over $10 billion in bringing to production gas discoveries off the east coast, its director (Exploration) D. K. Pande said on Tuesday.

ONGC is aiming to develop finds in Krishna Godavari basin through four different projects, he said on the sidelines of the Petrotech-2010 oil and gas conference here.

“We are targeting 25-30 million standard cubic meters per day of natural gas production by 2014-15," he said.

The G-1 and G-15 fields will produce 2 mmscmd of natural gas from 2011 while S-1 and Vasistha deep-water project will produce 5 mmscmd.

However, the major push will come from development of finds in and around block KG-DWN-98/2, which sits next to Reliance Industries’ giant KG-D6 block.

Pande said the block now has 10 gas discoveries and ONGC plans to tie-up nine of these with six gas finds in neighbouring 1G block to produce 20-25 mmsmcd from 2014-15.

“This development will cost $4.5 billion," he said. Another $5 billion will be needed to develop the ultra-deepsea UD-1 discovery in the KG-DWN-98/2. This discovery will be developed at a later date.

ONGC is in talks with energy majors BP Plc, Exxon Mobil, BG Group and Eni for a strategic tie-up for developing the KG basin discoveries.

Besides, ONGC plans to produce 10,000-20,000 barrels of oil per day from G-4-6, GS-29-1 and G-4-5 by 2012-13, he said.

The company has commissioned an onshore processing terminal at Odalarevu that will receive hydrocarbons from GS-15 field. The terminal is 90-km south-east of Rajahmundry in Andhra Pradesh.

ONGC has approached the Directorate General of Hydrocarbons (DGH) for declaring commerciality of nine discoveries in the northern part of the KG-DWN-98/2 block.

The southern exploration area of the block includes the UD-1 deepwater discovery, which is being appraised, Pande said.

The UD-1 discovery was made at a water depth of 2,841 metres and in-place reserves have been estimated at about 82.3 billion cubic meters of gas.

ONGC holds 90% interest in the block and the rest is with Cairn India.