State-owned Oil and Natural Gas Corp expects to scale peak output of about 5 million standard cubic meters per day from its Vashishta gas field in KG basin by July this year.
Vashishta and S1 gas fields, located in the Krishna- Godavari (KG) Offshore Basin off the east coast of India, began operations in September last year. "We are producing 1.1 million standard cubic meters per day from the fields currently and hope to reach about 5 mmscmd by July," a senior company official said.
The fields were developed under a greenfield deepwater development project at an investment of $751.65 million.
The Vashishta field is estimated to produce 9.56 billion cubic metres (bcm) over a period of nine years with peak production reaching 3.55 million metric standard cubic metres a day (mmscmd) during the first five years.
The S1 field is expected to deliver 6.22 bcm over a period of eight years with a peak production of 2.2 mmscmd for the first five years.
As part of the Vashishta and S1 field development, ONGC is drilling four wells and shipping the gas from them through a sub-sea pipeline to an onshore terminal at Odalarevu in Andhra Pradesh, he said.
The Vashishta field lies in water depths varying between 500 meters and 700 meters and about between 31-35 km from the Amalapuram coast.
The S1 field is located in water depths of between 250 meters and 600 meters, and approximately between 26k-29 km from the Amalapuram coast. While the Vashishta field is a free gas field with estimated reserves of 12.92 bcm, the S1 field lies to the east of G-1 field and is a free gas field with estimated reserves of 10.37 bcm. The official said Vashishta is the first field in the country to get the premium price of gas.
In March last year, the government had allowed higher price for new gas production from difficulties areas like deep sea, ultra deepwater and high pressure, high temperature areas. When ONGC started production the premium price was $6.61 per million British thermal unit as against a cap price of $3.06 per mmBut for regular fields.
"We got $6.61 per mmBtu for about a month," he said.
The premium price for period between October 2016 and March 2017 was cut to $5.3 per mmBtu based on benchmark rates in gas surplus economies. The rate for regular gas price also declined to $2.50 per mmBtu.
The official said the gas was sold to state gas utility GAIL. "We have pricing and marketing freedom and we will auction the incremental production. Whosoever pays us the best price, subject to the government prescribed ceiling, will get the gas," he added.
Govt lets Cairn India drill 64 KG Basin exploratory, appraisal wells
A committee under the Ministry of Environment, Forests and Climate Change has given a green signal to Cairn India for undertaking drilling works of 64 exploratory and appraisal wells in KG-OSN-2009/3 block in KG basin at Prakasam and Guntur districts of Andhra Pradesh.
The Expert Appraisal Committee (EAC) while according to environmental clearance set a few conditions along with other specific and general environmental conditions relevant to the project proposal.
After examining the facts and detailed deliberations the committee decided to recommend the proposal for grant of environmental clearance subject to compliance of following conditions along with other specific and general environmental conditions relevant to the project proposal, the EAC said in the minutes of the meeting held recently.
Cairn India Limited has proposed for drilling of 55 exploratory and 11 appraisal wells in KG-OSN-2009/3 block in Offshore KG Basin. The offshore block in the Bay of Bengal along the coast of Andhra Pradesh is spread over an area of about 1988 km. The block covers partly the offshore areas of Prakasam and Guntur districts.
Cairn India had earlier said it declared force majeure of two of its oil and gas blocks including KG-OSN-2009/3 due to the objections raised by the Ministry of Defence for taking up exploratory works. However, the company, in 2014, got necessary clearance from the Ministries concerned.
The block was awarded to Cairn India on 30 June 2010 as part of the NELP-VIII round for exploration of hydrocarbons and production. The company has 100 per cent stake in the Block, according to the last year s annual report.
Exploratory/Appraisal drilling is carried out in the identified sub-surface structures to find out if there is presence of hydrocarbons in commercially exploitable quantities, an expert in oil and gas filed said.
Cairn India shares were trading at Rs 262.90 apiece on BSE down 2.01 per cent at 1400 hrs.