ONGC plans desalter unit in Mehsana

Exploration major ONGC is planning to set up another crude desalter plant in Mehsana, similar to its existing facility in Nawagam at an estimated cost of Rs 150-200 crore.

The company is also planning to lay an 85-km trunk pipeline from Mehsana to Nawagam for crude transfer at an estimated investment of Rs 120 crore. It plans to set up four storage tanks with a total capacity of 40,000 cubic meters.

Desalting is usually the first process in crude oil refining. It separates water and dissolved salt from crude oil.

“We have proposed to set up a desalter plant at Mehsana, the capacity of which has been visualised at 25,000 cubic meters per day. It’s at an assessment and evaluation stage and we may soon rope in consultants for the design part,” said A K Gupta, executive director, Mehsana Asset, ONGC.

The investment in the three projects, including the trunk pipeline and new storage tanks, could well go up to Rs 500 crore.

The new facility will mainly deliver crude found in north Gujarat to Indian Oil’s refinery in Vadodara.

ONGC has already chalked out an investment of Rs 1,000 crore for exploration in 50 new wells at its Mehsana asset during 2010-2011. This would include revamping of pipelines at an estimated investment of Rs 250 crore.

The new unit would save in-transit loss for the company and could also cater to private players such as Essar, which have their onshore blocks in the region, said industry sources.

“Already, we are processing some amount of crude for Essar at our Mehsana crude transfer facility,” said an ONGC official. The capacity of the upcoming facility could, however, not be ascertained.

Currently, the Nawagam unit processes crude oil from Ahmedabad and Mehsana assets of ONGC, with a combined daily production of about 10,500 tonnes, which is dispatched to Indian Oil Corporation’s (IOC) Koyali Refinery in Vadodara.

Once the new unit is in place, Nawagam would process crude oil only from the blocks in the Ahmedabad district, sources added.

In the past, ONGC has paid penalties to the tune of Rs 65 crore for not being able to maintain the basic sediments and water (BS&W) level.

However, from October 2007 onwards, the company has been able to meet the specifications of the refinery and has not paid any penalty thereon.

ONGC produces 6,000 tonnes of oil from its Mehsana asset, which it aims to raise to 7,000 tonnes per day in a few years.