Success at last for ONGC with Cauvery gas sales

Vol 20, PW 8 (12 Jan 17) Midstream & Downstream

ONGC's tender to sell gas from its onshore Pundi field in Tamil Nadu found no takers.

But happily there's better news for gas sales from two of its smaller onland Cauvery basin fields in the state. ONGC is expected to issue LoAs this month (January) to KEI-RSOS Petroleum & Energy which has won gas supplies from the isolated Andimadam and Vadatheru fields.

When ONGC opened price bids in December KEI-RSOS quoted a $1/mmbtu premium over the government-set current base gas price of $2.50/mmbtu at both fields. From each of the two fields KEI-RSOS will take 6500 cm/d for five years.

ONGC should be ready to supply the gas by April 2017 at gas collecting stations within the Early Production Systems it is presently setting up. KEI-RSOS will then have another 90 days to begin drawing gas.

A company source says it will set up one CNG compressor at each delivery point at Andimadam and Vadatheru and then load the CNG into 4500 cubic metre tube trailers or trucks that will transport it to local ceramics manufacturers within a 50-km radius. KEI-RSOS will assign one tube trailer to each field.

Overall it plans to spend Rs10cr ($1.5m) to prepare for gas offtake. No companies submitted bids by ONGC's December 1 deadline for 11,500 cm/d of gas from Pundi.

Only KEI-RSOS and Sri Varahi Chemicals bought bid documents.