Sairama wins $475m Assam upgrade job from ONGC

Vol 12, PW 21 (26 Mar 09) Exploration & Production

More than a year after the tender was issued, contractors working for ONGC have finally begun a four-year programme to revamp decrepit surface facilities at its Lakwa and Lakhmani fields in Assam - aimed at doubling oil and gas production.

This follows a LoI (Letter of Intent) issued to a consortium of Hyderabad-based Sairama Engineering, Megha Engineering and Infrastructure and Volgograd Neftegazstroi of Russia. Work on site has begun with consortium leader Sairama carrying out initial engineering work.

But the project will formally launch only after a meeting at ONGC’s offices in Delhi on April 9 following which a Sairama-led team will carry out a detailed inspection of site facilities at Lakwa and Lakhmani. Physical construction work will begin in August and September this year when the summer monsoon tapers off.

ONGC directors formally sanctioned an investment of Rs2465cr ($493m) for the revamp programme at the two fields (clubbed together as Group A) on March 5 but the actual value of the contract awarded to Sairama is Rs2378cr ($475m) – some Rs87cr ($18m) lower than sanctioned. Lakwa and Lakhmani account for more than 40% of ONGC’s total Assam production but the fields together produce only around 13,000 b/d oil and 846,000 cm/d gas from 173 wells because of surface facilities that are 30-40 years old.

Under the LoI, Sairama must completely upgrade the surface facilities and associated 480-km pipeline network at both fields as well as upgrade an existing 9-MW captive power station to 40-MW by March 16, 2013. When the upgrade is completed, the existing nine group gathering stations (for crude) will be reduced to five and the four gas compressing facilities will be cut to two.

When new facilities are in place, ONGC intends to separately workover and service wells at the two fields and double production to 25,000 b/d and 2m cm/d so the fields can produce for another 25 years.