ONGC is betting on its new offshore Daman fields, expected to come on stream in 2015, to boost the production of gas even as ageing fields take a toll on output. So much so that the public sector oil and gas major has fast-tracked the development of this west coast block by four years in order to reap the dividends earlier.
A senior ONGC official told FE that the shallow-
water Daman fields hold over 4 trillion cubic feet (tcf) of reserves and will have a peak production of 14 million standard cubic meter per day (mmscmd), expected by FY20.
This is comparable to RIL’s current output at D1 and D3 fields in the KG-D6 block of close to 14 mmscmd.
Located at a depth of less than 100 metres, the Daman offshore block is an integrated project between the B-12 and C-24 fields and some marginal C Series fields currently producing small quantities of gas.
The official said ONGC was awaiting board approval to set up a gas processing plant in Daman. “We cannot use our other gas processing plants as there is little capacity left to process the Daman gas,” he said. ONGC currently has two gas processing plants at Hazira in Gujarat and Uran near Mumbai. The Daman plant is expected to have a processing capacity of 10 mmscmd and a 30 MW captive power plant as part of the project. The project includes a pipeline for the evacuation of the gas that has already been set up.
The official added that the new pricing formula, based on the Rangarajan formula linked to global hub prices, will be remunerative as the Daman gas resides in shallow water fields. The C series marginal fields, which will be integrated into the project, have started producing small quantities and has a break- even price of around $3.8/mmBtu.
Analysts say ONGC's Daman block – along with its deepwater KG basin block and the Mahanadi basin blocks – is among the bright spots that will make a material contribution to the company's gas production in the coming years. ONGC is also expected to hit a peak production of around 5-6 mmscmd at its Tripura gas fields.
Among the KG basin blocks, the GS 15 block is already producing since August 2012 while the G block will be on stream by September 2013. As far as the most prospective deepwater KG