ONGC soon to award EPC contract for C2 extraction

Vol 9, PW 7 (14 Jul 05) Midstream & Downstream

Expect ONGC to award the EPC contract in October this year for a project to extract C2, C3 and C4 from 5m t/y LNG received by Petronet-LNG at Dahej.

Eight companies purchased bid documents for the tender, which was issued in December last year, among them: Linde AG of Germany, Technimont SPA of Italy, Toyo Engineering of Japan, Engineers India, Larsen & Toubro, Samsung Engineering and Progen Systems and Technologies. ONGC had earlier expected that it would be allowed to extract C2, C3 and C4 from the entire 10m t/y LNG imported by Petronet-LNG and estimated total project cost at Rs1493cr ($331m) including a royalty payment of Rs291cr.

But GAIL strongly opposed the grant of these exclusive extraction rights to ONGC, saying its own LPG extraction factories need the gas to stay in business. Ministry officials eventually agreed with GAIL and allocated 5m t/y for ONGC and the other 5m t/y to GAIL.

A formal order is expected soon. GAIL will extract C2, C3 and C4 from its allocation by expanding capacity at its Pata petrochemical complex.

ONGC has appointed Britains Foster Wheeler Energy as its project management consultant for the 5m t/y Dahej C2, C3, C4 extraction project. Included in Foster Wheelers brief is to estimate the cost of the project.

ONGC tells us the project has been delayed because earlier it was supposed to extract only C2 and C3 but now its being allowed to extract LPG also. Once ONGC awards the EPC contract, it wants the extraction facilities ready within 30 months.

The C2, C3 and C4 extracted will form the feedstock for the petrochemical complex that is being actively considered for Dahej by ONGC management. From 5m t/y LNG at Dahej, ONGC will extract 0.465 t/y C2, followed by 0.2252 t/y C3 and 0.155 t/y of C4.