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| ONGC to start gas production from KG Basin block in 2016-17 |
| Press Trust of India / New Delhi Aug 26, 2010, 17:57 IST |
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 State-owned Oil and Natural Gas Corp (ONGC) will start producing natural gas from a block that sits next to Reliance Industries' prolific KG-D6 fields in the Bay of Bengal in 2016-17.
Minister of State for Petroleum and Natural Gas Jitin Prasada today informed the Lok Sabha that in-place gas reserves of 3.42 trillion cubic feet have been established in block KG-DWN-98/2, in the Krishna-Godavari basin.
Of this, 1.904 trillion cubic feet (Tcf) is recoverable.
"ONGC has submitted Declaration of Commerciality for the Northern and Southern Discovery Area in the block," he said.
Seven of the finds are in the northern part of the block, where Cairn India holds a minority 10 per cent stake. Gas from these is proposed to be produced by combining them with two other gas discoveries in the adjacent block, he said.
"The DoC is under examination in the Directorate General of Hydrocarbons (DGH)," he said.
While Prasada did not indicate the expected production from the block, company sources said 25-30 million standard cubic metres per day of gas can be produced by 2016.
Once the DGH approves the commercial viability of the finds, ONGC will make a formal field development plan (FDP) outlining the specifics of producing gas from the find.
ONGC has tentatively pegged the investment required for bringing to production the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in the Northern Discovery Area (NDA) of the block at over $5 billion, sources said.
As the discoveries are not independently viable, the firm plans to tie them with finds in the neighbouring acreage and develop them as a cluster. ONGC envisages 25-30 million standard cubic metres per day of output from the NDA fields and G-4 and GS-29 finds in the neighbouring acreage by 2016.
ONGC's KG-DWN-98/2 block sits next to the prolific KG-D6 block of Reliance Industries in the Krishna-Godavari basin, off the East Coast.
The state-owned company had a few months back put an investment requirement of $4.05 billion for producing natural gas from the ultra deep sea UD-1 discovery in the southern part of the KG-DWN-98/2 block.
Sources said UD-1 is being planned to be developed separately and together with the NDA fields, ONGC's total spending would be in the region of $10 billion.
Sources said ONGC has so far drilled a total of 13 exploratory wells in the 7,294 sq km block, which is divided into northern and southern appraisal areas.
The Northern Discovery Area (NDA) consists of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in in water depths ranging from 594 metres to 1,283 metres. The Southern Discovery Area consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841 metres.
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