ONGC to start oil, gas production from KG basin by Sept

State-owned Oil and Natural Gas Corp (ONGC) is likely to start oil and gas production from its first deepsea field in Krishna-Godavari basin off Andhra coast by September. ONGC plans to use temporary facilities to begin production from G-1 marginal field in the KG basin by August-end or early September, company sources said. Initial production is likely to be about 1 million standard cubic metres per day from two wells.

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Sources said peak output from the field was originally envisaged at 2.2 mmscmd but the company lost a well due to a gas blowout last year. The well had to be plugged and abandoned. In all, ONGC had planned to drill 4 wells to produce 2.2 mmscmd of gas. But with loss of one well, the peak output now envisaged is 1.6-1.7 mmscmd which will be achieved by June/July next year.

ONGC will sell the gas to state-owned GAIL India LtdBSE -1.71 % at USD 4.75 per million British thermal unit.G-1 field, which will also produce some oil, was originally to be developed with a neighbouring GS-15 field.GS-15 began production in September 2011 and G-1 was to start output in July 2012 but the production was delayed.GS-15, which touched a peak of 0.19 mmscmd, has been declining and is currently producing about 100,000 cubic metres per day of gas and about 100 cubic metres of oil.The twin fields are expected to be in production till 2022-23 when output would taper to 0.029 mmscmd.

ONGC envisages the production of 0.982 million tonnes of sweet or low-sulfur crude and 5.92 billion cubic metres of gas over a period of 15 years from G-1 and GS-15.G-1 is located 28 kilometres off the Amalapuram coast, in water depths ranging from 135 to 500 metres, while GS-15 is located 5 km from the coast in the KG Basin.Sources said G-1 and GS-15 are two marginal fields that were awarded to ONGC on a nomination basis. The two acreages are being developed together at an estimated cost of Rs 1,200 crore. ONGC, they said, plans to drill another well to replaced the plugged and abandoned well that leaked gas, which may take at least 18 months.

G-1 field development cost was originally estimated at Rs 1,200 crore but owing to delays, it now stands at Rs 2,735 crore. G1 was the first deepwater field to be developed by ONGC.