ONGC to sell 15,000 scmd gas to consumers directly

Invites e-bids from parties interested in procuring natural gas from the company

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In a move that could increase gas availability for small and medium enterprises (SMEs) and reduce gas flaring from the wells, the public sector major, Oil and Natural Gas Corporation Ltd (ONGC) has decided to sell natural gas from its small and marginal gas fields to the consumers directly. On a pilot basis, the Ahmedabad Asset of ONGC has invited bids for the sale of gas from its one of the marginal gas fields near Kheda in Gujarat.

The company has issued a tender notice inviting e-bids under single bid system from the gas consumers for sourcing 15,000 standard cubic meters per day (scmd) gas available for allocation on fall-back (as and when available) basis from ONGC's small/isolated and marginal field of Ahmedabad Asset through e-procurement.

"We have invited e-bids from the interested natural gas consumers for supply of about 15,000 scmd of gas for a period of five years. This move will also help in reducing gas flaring (releasing gas in open air) at these small fields. At Gamij, the gas has been flaring for past one year," said Anil Johari, executive director - asset manager, Ahmedabad Asset - ONGC. Ahmedabad asset produces about 700,000 scmd of natural gas. "The initiative by ONGC will utilise the gas reserves at such small fields and make it available to consumers. This is a part of company's objective to monetise the small and marginal fields," he said.

The delivery point for gas is Gamij field, from where the entire gas quantity will be supplied. Gamij (GGS#3) field is loated at Halderwas village near Mehmadabad of Kheda district, about 45 kms from Ahmedabad.

The interested consumers have been asked to submit their bids between July 9, 2012 to July 30, 2012. ONGC has also arranged a pre-bid conference on August 16, 2012. Tender closing date is September 14, 2012, while the submitted tenders will be opened on the same day. The price of gas under the bid is as per non-APM gas price issued by Ministry of Petroleum and Natural Gas (MoPNG), Government of India.

As the pipeline infrastructure is not ready to transport gas from Gamij field to other industrial areas in Gujarat, it is believed that industries located nearby Gamij gas field will take the benefit of the same.

"We hope that assured gas availability will attract new units to this area and bring overall development for surrounding villages. Also, some nearby industries such as ceramics and tiles are likely to benefit. Already, several consumers are eagerly waiting for gas supply by ONGC. " he said.

Of the 35 existing discovered fields under ONCG's Ahmedabad Asset, about 6 to 7 are considered as small or isolated fields. However, the gas sale is possible only from the Gamij field.

"Such arrangement can surely benefit surrounding industries. Units can compress the gas and take it to their facility. This will make gas availability assured at the non-APM price from ONGC," said an industry source.

"As per an estimate, there is upto 600,000 scm of gas available at about 25-30 such small and isolated fields across country. This model can be replicated at ONGC's other fields as well," Johari added.

After the successful execution of the project at Gamij, some more gas fields from other on-shore assets of ONGC including Rajahmundry Asset and Assam Asset may go for direct sale of gas to consumers through e-bidding.