Essar Projects, Corrtech Energy, Punj Lloyd, JSIW Infrastructure, Jaihind Projects and KazStroyService are learnt to have shown interest for setting up a 200-km pipeline from Cairn India’s Raageshwari gas processing terminal in Rajasthan to Gujarat State Petronet?s storage facility at Palanpur.
The Vedanta Group company is targeting to produce ‘substantial’ natural gas in the next three years from the Barmer block in Rajasthan, which is currently the country’s biggest onshore crude oil producing asset.
The pipeline, integral to this plan, is expected to cost around Rs 800-1,000 crore, say industry experts.
?Cairn India has been able to drill two high-impact prospects to test potential gas accumulation in the deeper section. Initial results from two high impact prospects drilled during the current exploration campaign are encouraging,? said a company official.
The Anil Agarwal-promoted company has found a prolific gas field ? Raageshwari ? in the south of the Barmer block in Rajasthan. Gas from the field is currently processed at Raageshwari gas terminal (RGT), which is situated at about 80 km from crude oil processing terminal known as Mangala processing terminal (MPT).
Rough estimates show that the Raageshwari filed could produce up to 8-15 million standard cubic metres a day (mscmd) of natural gas.
However, Cairn India is yet to give an outlook on its gas production.
The private explorer proposes to upgrade RGT and construct a new gas pipeline to monetise the additional gas potential in the block.
The new gas processing plant at existing RGT is aimed to have capacity to process 100-300 million standard cubic feet of gas per day (mscfd). The company needs to install a pipeline system to take the gas to the nearest grid.
Cairn India and its partner ONGC called for Expression of Interest (EoI) for upgrading RGT and lay the pipeline from domestic and international companies. The scope of work involves detailed design, engineering, procurement, fabrication, complete installation and commissioning on an EPC basis.
Cairn’s flagship Barmer field touched higher ever crude oil output of 200,000 barrels per day (bpd) in FY14. Now, the issue to be looked at is the production sharing contract for the Barmer block is set to expire on May 14, 2020, and the Directorate General of Hydrocarbons (DGH) said not more than a five-year extension from that date could be given.
The oil regulator has said that Barmer is primarily oil-producing and hence the contract can be extended only for five years. In case it can prove as a gas producing fields, the PSC could be extended by another 10 years.The private explorer that reported an operational expenditure of $3.90/barrel in FY14 for the Barmer asset targets to spend $2.4 billion over the next three years.