ONGC awards Rs 11,741 cr contract to Baker Hughes, McDermott, L&T

State-owned Oil and Natural Gas Corp (ONGC) said Wednesday it has awarded a Rs 11,740.86 crore contract for development of its mega KG-D5 oil and gas fields to a consortium of Baker Hughes, McDermott International and L&T Hydrocarbon Engineering.

ONGC is developing a cluster of oil and gas discoveries in Krishna Godavari basin block KG-DWN-98/2 (KG-D5) at a cost of over USD 5 billion. The first gas is targeted for end 2019 and oil in March 2021.

The consortium was awarded the subsea production system (SPS) including 34 deepwater trees, and the installation of subsea umbilicals, risers and flowlines (SURF) at water depth of between 300 metres and 3,200 metres, it said in a statement here.

"This tender is one of the biggest integrated (SPS + SURF) tenders awarded globally in recent years," ONGC said.

ONGC said it took a strategic decision of integrating hitherto separate work packages of SPS and SURF into a single integrated.

"This will help eliminate major interface issues among SPS and SURF packages, resulting in time and cost optimisation to the company," the statement said.

Total peak gas production rate from Cluster-2 is envisaged to be about 16 million standard cubic metres per day and peak oil production rate of 80,000 barrels per day.

"ONGC envisages commencement of first gas production by December 2019, first oil by March 2021 and overall project completion by August 2021," it added.

Baker Hughes, a GE company, will provide all of the subsea hardware as well as pre-commissioning services, and McDermott will bring its specialized fleet of pipelay and construction vessels and engineering, procurement, construction and installation capabilities, the two firms said in a separate statement.

"By reducing the number of interfaces across the project, the group aims to reduce complexity, drive speed and increase execution efficiency for ONGC," it said.

The project is one of the first major deepwater developments in India and a milestone for realizing country's domestic energy potential.

"The group will offer a comprehensive solution that will also boost local manufacturing, in support of Make in India," the statement by Baker Hughes and McDermott said. The subsea award represents the largest single subsea contract awarded by ONGC.

Delivery is scheduled for 2020 for the gas system and 2021 for the oil system, it said.