Rivalry with ONGC could block gas storage project

Vol 8, PW 20 (12 Jan 05) Midstream & Downstream

Like so many projects in the Indian oil sector, the proposed natural gas storage project has fallen victim to rivalry between Indias state-owned oil companies.

ONGC is upset with GAIL because it has floated the project consultancy tender without telling it. Read the tender documents and it says GAIL alone will construct the storage facility; there is no mention of any other company.

We clearly told the ministry that since ONGCs fields are involved we would like to implement the project, an ONGC official tells this report. So intense is the rivalry that ONGC has refused to part with detailed information on its onshore gas producing fields.

This project involves studying reservoir characteristics, he adds. This is an area for ONGC professionals.

Not consultants from elsewhere. How will the consultant carry out the study without data on our fields During the oil ministry meeting last month, ONGC director business development AK Balyan said none of the companys oil and gasfields could be classified as depleted.

Continues our source: Though our Gujarat and northeast fields are old, they are not depleted. They are constantly resurrected to new life.

ONGC believes GAIL should have taken other companies into confidence before calling consultancy bids in line with guidelines for projects funded by the Oil Industry Development Board. The OIDB has pledged an initial Rs500, 000 ($11,000) for the project study.

When contacted GAIL admits it does not have data on ONGC or Oil Indias depleted fields. But this does not mean we cannot take the project forward, he said.

ONGC will give us the data. On a positive note, the proposed natural gas storage facility will showcase Gaz de Frances expertise.

GdF is the worlds second largest underground natural gas storage operator and will advise GAIL, ONGC and OIL.