ONGC looks at mini-LNG plants to evacuate natural gas from isolated fields

State-owned Oil and Natural Gas Corporation (ONGC) is looking to set up mini-LNG plants to evacuate natural gas from wells located in areas that are not connected with pipelines.

The firm has identified five sites in Andhra Pradesh, Jharkhand and Gujarat for setting up mini plants at wellhead that will convert the gas pumped out from under the ground into liquefied natural gas (LNG) by supercooling it to minus 160 degrees celsius.

This LNG will be loaded on cryogenic trucks and transported to the nearest pipeline where it will be reconverted into its gaseous state and pumped into the network for supply to users like power plants, fertilizer units or city gas retailers.

ONGC has floated a tender seeking manufacturers/service providers to tap stranded natural gas, according to the tender.

The locations identified for setting up mini-LNG plants in the tender are two sites at Rajahmundry in Andhra Pradesh and one each at Ankleshwar in Gujarat, Bokaro in Jharkhand and Cambay in Gujarat.

ONGC in the tender document said while the country has an extensive network of pipelines that connect supply and demand centres, there remains a substantial volume of stranded gas (non-connected) that is required to be tapped for enhancing domestic supplies and meeting the needs of nearby demand centres.

The stranded volumes, it said, range from 5,000 to 50,000 standard cubic meters per day that can be produced for up to 5 years.

The tender called for bids from manufacturers and service providers to "set up a small scale LNG plant on BOO (build, own and operate) basis to produce LNG, transport the produced LNG by cascades / tankers to consumption sites located within a distance of around 250 kilometers, depressurize / re-gasify the LNG and then inject the gas into existing gas distribution grids or supply directly to bulk consumers."

India produces over 90 million standard cubic meters per day of natural gas that is used to generate electricity, produce fertilisers or turned into CNG to run automobiles and piped into household kitchens for cooking purposes. But domestic production meets roughly half of the demand.

ONGC is India's largest crude oil and natural gas producer and has been investing billions of dollars to boost production to cut India's reliance on imports.

Prior to floating of this tender, it had entered into a partnership with nation's largest fuel retailer Indian Oil Corporation (IOC) to set up a small-scale LNG plant near its Hatta gas field in Vindhyan basin in Madhya Pradesh.

The Hatta gas field is located in Batiyagarh tehsil of Damoh district in Madhya Pradesh, approximately 45 km from Damoh town.

The initial LNG plant capacity is planned for 32 to 35 tonnes, with 45,000 standard cubic meters per day of gas coming from the Hatta field.

As per that agreement, IOC, which is conducting a detailed feasibility study of the project, will bear the cost of the small-scale LNG plant. ONGC will sell gas to IOC. The LNG plant will be operated and managed by IOC and it will further sell the gas to consumers.

Earlier in March this year, state-owned gas utility GAIL (India) Ltd had announced setting up a small-scale LNG plant at its Vijaipur LPG unit in Madhya Pradesh.

Officials said ONGC has over 100 wells across the country where the volumes are very small to make laying pipelines economically unviable. This gas is lying stranded or has to be flared currently. Small LNG plants can help tap this vital resource, helping boost domestic output.