ONGC to invest $5 bn to develop KG basin oil and gas block

State-owned Oil and Natural Gas Corp (ONGC) today said it will invest USD 5.07 billion in bringing to production its KG Basin oil and gas discoveries by 2019-2020.
"Our Board of Directors today approved the Field Development Plan (FDP) for the development of fields falling under Cluster 2 of the deep-water NELP Block KG-DWN-98/2 (KG-D5)," ONGC Chairman and Managing Director Dinesh K Sarraf said.
Gas output is expected to start by June 2019 and oil will start flowing from March 2020.
"Peak oil production will be of 77,035 barrels per day while gas output would be 12.75 million standard cubic meters per day," Sarraf said.

Sources said GSPC also wants ONGC to use its under-sea
infrastructure for a fee.

ONGC has gas discoveries in a neighbouring block and GSPC wants gas from those to be routed through its Deendayal block infrastructure for onward transportation to the shore.
But the state-owned firm feels it was not technically feasible as its KG-D5 gas cannot be mixed with GSPC's gas which has high levels of sulphur and carbon dioxide content. Also it is high-pressure and high-temperature gas.
Besides, the GSPC facilities on Deendayal field are about 60-km away from the Cluster-II gas fields in ONGC's KG-DWN- 98/2 block and pumping gas that far is not feasible.

Sources said ONGC feels it is not cost effective to install compressors on the seabed to pump gas from its fields to GSPC facilities.
GSPC's field is one of the most difficult fields in the world as cost of extracting gas would be in the vicinity of USD 12 per million British thermal unit, double the rate provided by the government currently, they said.
The company is producing 0.6 million standard cubic metres per day (mmscmd) of gas from the field as trial production for almost two years now.
As per the approved field development plan (FDP), natural gas production was to reach 3.83 mmscmd in second year and achieve peak output of 5.24 mmscmd in the third.