State-owned Oil and Natural Gas Corporation (ONGC) has offered preliminary gas it’s producing from its KG basin fields within the Bay of Bengal to three corporations, together with Torrent Gas, sources mentioned.
In an e-auction, the agency offered 1.4 million customary cubic metres per day – a fraction of the deliberate output from the block that sits subsequent to Reliance Industries’ prolific KG-D6 space within the Bay of Bengal, to Torrent Gas Pune Ltd., GAIL (India) Ltd., and Hindustan Petroleum Corporation Ltd. (HPCL).
GAIL picked up 0.8 mmscmd, whereas HPCL took 0.42 mmscmd and Torrent 0.12 mmscmd, sources conscious of the matter mentioned.
The firm had sought bids from customers like metropolis gas operators that promote CNG to vehicles and pipe cooking gas to households, corporations utilizing gas to produce fertilizers or make electrical energy, LPG producers and merchants, for the gas from its KG-DWN-98/2 or KG-D5 block.
ONGC requested corporations to quote a premium ‘P’ that they’re keen to pay over and above the speed arrived at by calculating 14% prevailing Brent oil value plus $1 per million British thermal unit, the tender doc confirmed.
At the present Brent crude oil value of $74 per barrel, the bottom value comes to $11.3 per mmBtu ($10.36 per mmBtu at 14% of Brent oil value plus a mark-up of $1).
The sale value will, nevertheless, be the decrease of the worth arrived at utilizing this components or the speed that oil ministry’s arm PPAC notifies twice a 12 months for deep sea fields. The ceiling value for tough to produce fields like deep sea for six months beginning April 1 is $12.12 per mmBtu.
So the gas value for Torrent and others can be $11.3 per mmBtu.
The firm has but once more delayed the beginning of manufacturing from the primary fields within the block.
ONGC was initially to begin gas manufacturing from Cluster-II fields within the KG-D5 in June 2019 and the primary oil was to circulate in March 2020.
The firm blamed contracting and provide chains points due to the pandemic for shifting the beginning of oil manufacturing first to November 2021, then to the third quarter of 2022 after which to June 2023. Gas output begin goal was first revised to May 2021, then to May 2023 after which to May 2024 for non-associated gas to begin flowing.
However, these timelines have now been shifted to August, sources mentioned.
A floating manufacturing unit, known as FPSO, which will likely be used to produce oil, is already in Indian waters. ONGC will begin with 10,000 to 12,000 barrels per day and attain the height of 45,000 bpd in 2-3 months, they mentioned including some gas would additionally circulate with oil however precise gas output will begin in May 2024 when 7-8 mmscmd manufacturing is anticipated.
The manufacturing estimates are nevertheless a lot decrease than what was initially projected.
At the time of its launch in April 2018, ONGC had mentioned the estimated capital expenditure can be $5.07 billion and operational expenditure can be $5.12 billion over a subject lifetime of 16 years.
The block has quite a lot of discoveries which have been clubbed into three clusters – Cluster-1, 2 and three. Cluster 2 is being put to manufacturing first.
Cluster 2 subject is split into two blocks specifically 2A and 2B, which as per the unique funding resolution have been anticipated to produce 23.52 million metric tonnes of oil and 50.70 billion cubic metres (bcm) of gas over the lifetime of the sector.
Cluster 2A was estimated to include reserves of 94.26 million tonnes of crude oil and 21.75 bcm of related gas, whereas Cluster 2B is estimated to host 51.98 bcm of gas reserves.
Cluster 2A was anticipated to produce 77,305 barrels of oil per day (bopd) and related gas at a fee of three.81 million metric customary cubic metres per day (mmscmd) over 15 years. Cluster 2B is anticipated to produce free gas of 12.75 mmscmd from eight wells and has a 16-year life.
But now the output estimate is decrease – 45,000 bpd of oil and up to 2.5 mmscmd from Cluster 2A and round 9 mmscmd from Cluster 2B.
