North Tapti gas hostage to Cairn transit tariff

Vol 14, PW 24 (02 Jun 11) Exploration & Production

High gas transportation charges demanded by Cairn could derail ONGC plans to begin gas supplies this month (June) from its 50-sq km North Tapti gasfield in the western offshore.

PETROWATCH learns ONGC wants to flow first North Tapti gas of up to 100,000 cm/d from June 15 to factories in south Gujarat. This gas will flow from one well drilled and completed at the North Tapti field on May 7 by Jindal Drilling-managed rig Noble Charlie Yester.

But to get the gas from North Tapti to shore, ONGC depends on Cairn, which operates the adjacent CB-OS/2 block: home to the producing Lakshmi and Gauri fields. ONGC has laid a 17-km gas pipeline to transport gas from North Tapti to the Lakshmi platform.

From Lakshmi it plans to transport North Tapti gas to the Suvali landfall point on the south Gujarat coast through a 35-km subsea pipeline owned and operated by Cairn. But ONGC is shocked at the $0.80/mmbtu Cairn is demanding for the use of its Lakshmi platform and pipeline from Lakshmi to Suvali.

“There’s no way ONGC will pay Cairn $0.80/mmbtu,” says ONGC. “It’s too high.

” ONGC held a first meeting with Cairn on May 13 in Mumbai to try to resolve the impasse and a second meeting on May 24 through video-conferencing. Unclear is if any agreement was reached.

Gas supplies from North Tapti, when they begin, will be ‘dry’, low in sulphur with no condensate and 98% methane. After completing the well at North Tapti on May 7, Noble Charlie Yester was released by ONGC on May 15 in anticipation of the fast-approaching monsoon.

ONGC plans to drill five more wells from the recently installed North Tapti platform, but only after September 15 when the monsoon season ends in the western offshore.