Gas from C-Series fields to start flowing by early June

Vol 12, PW 25 (21 May 09) Midstream & Downstream

Good news for gas starved industrial and commercial consumers receiving gas from the Uran gas receiving station on the outskirts of Mumbai.

By the first week of June, or maybe as early as the end of the May, ONGC will begin long-awaited supplies of gas from the C-Series marginal fields in the Mumbai Offshore. Initial supplies of 500,000 cm/d will be gradually ramped up within a year to full capacity of 3m cm/d from two offshore platforms.

ONGC will land this gas at Uran before GAIL takes ownership for onward sale to retail customers. We hear that ONGC will sign a Gas Sales Agreement (GSA) with GAIL either this week or next week before turning on the C-Series tap.

Present gas production will be from two platforms, says an ONGC source. “A third platform is likely to be added later,â€‌ he adds.

GAIL has agreed to buy the gas at $5.5/mmbtu, delivered at Uran. The proposed five-year GSA with GAIL will have a price â€کre-opener’ clause that will be activated after three years.

ONGC is also in separate talks with GAIL to agree a price for Bandra Formation gas, also offshore Mumbai that will soon land at Uran. “A GSA for Bandra Formation gas will be signed with GAIL very soon,â€‌ says ONGC, which expects to produce 1m cm/d from this discovery, “maybe by early June.

â€‌ Unlike C-Series gas where production will be ramped up to full capacity within a year, ONGC believes it can produce 1m cm/d from the first day at Bandra Formation. This is because ONGC already tested the productive capability of the Bandra Formation during a three-month contract last year with Maharashtra state-owned power generating company MAHAGENCO.

“Bandra Formation gas will be supplied to GAIL for four or five years,â€‌ says ONGC. “During supplies to MAHAGENCO we collected a lot of information about the reservoir behaviour and this is coming in handy now.