Gas in January from two ONGC fields in Andhra

Vol 15, PW 3 (11 Aug 11) Midstream & Downstream

Factories and industries in Andhra Pradesh will soon be asked to apply for gas from two ONGC marginal fields.

PETROWATCH learns outgoing joint secretary marketing Apurva Chandra held a meeting in July with ONGC and GAIL to discuss the ONGC-operated Kammapalem (near Nellore) and Vyagreshwaram (near Rajahmundry) marginal fields, where commercial quantities of gas will become available from January next year. During the meeting, ONGC told Chandra the Vyagreshwaram and Kammapalem fields have already started producing gas.

Chandra directed GAIL to connect both fields to its local pipeline grid in time for commercial production in January. During the meeting, GAIL said it would start laying pipelines after monsoon rains, once it has made an investment decision.

Chandra directed GAIL to use the monsoon period for pre-project activities to ensure early work completion. Vyagreshwaram is currently producing 50,000 cm/d, all of it flared.

With expected peak production of 120,000 cm/d, Vyagreshwaram has already been connected to ONGC’s Early Production System (EPS) at Mandapeta (West) but Mandapeta (West) is not yet connected to the GAIL pipeline 2.5-km away. ONGC has drilled one well at Vyagreshwaram, which holds estimated ‘in place’ reserves of 142.8m, and is planning to drill two more.

At Kammapalem, ONGC is installing an EPS from where 50,000 cm/d gas will be delivered to GAIL’s pipeline grid 3-km away. With estimated gas ‘in-place’ of 518m cubic metres, peak production at Kammapalem will be around 110,000 cm/d, believes ONGC.

Anyone lucky to be nominated for this gas can expect to pay $4.75/mmbtu, but selection will be in line with the Gas Utilisation Policy that favours ‘priority’ power and fertiliser companies over ‘non-priority’ sectors. But if production is less than 50,000 cm/d, the Gas Utilisation Policy does not apply and the gas can be allocated by the ministry to any customer.