GSPC can sell gas to customers quicker than Reliance

Vol 9, PW 6 (30 Jun 05) Exploration & Production

GSPC is likely to beat Reliance in the race to sell gas from the Krishna Godavari offshore to customers in northern and western India.

Two similarities mark out GSPCs Deen Dayal gas discovery with Reliances Dhirubhai discoveries. First, both are from blocks that sit next to each other off Indias east coast.

GSPCs block KG-OSN 2001/3 lies partly onshore, with the Kakinada coast as its northern boundary. Its southern boundary is Reliances deepwater block KG-DWN-98/3 home to the 14-tcf Dhirubhai discoveries announced in 2002.

Are the two reservoirs linked No, says a GSPC source. Our structure does not extend to the Reliance block.

The Reliance discovery is from shallower depths between 1200 and 1400 metres and from the much younger Miocene era sediments. GSPCs discovery is from below 4000 metres and from the much older Upper Cretaceous era sediments.

Second, the two discoveries are both from blocks awarded during the NELP rounds. Here, the similarities end.

Differences between the two discoveries are much more. Reliances discovery is from channel sands and in more than 1700 metres water depth.

GSPCs discovery is from rift fill sediments in a sandstone reservoir at water depths of only 60 metres. Maximum water depths on the GSPC block are only 400 metres.

Finally, Reliances gas is biogenic; GSPCs is thermogenic. The implications of this are enormous on comparison of gas production economics.

Reliance wants to begin selling gas from August 2007 but it must first incur heavy capital expenditure as the field lies in deep water and sub sea completions are a must. GSPC is much better placed.

In 60 metres water depth you can send divers down, adds a source. Our gas collection system will be offshore and platform based.

We dont need sub sea completions. Reliances production costs will be high.

In short: GSPC can bring its field on production and, if it so wants to, start selling gas to customers much earlier than Reliance.