Oilex plans to sell Cambay field gas to GSPC

Vol 14, PW 20 (07 Apr 11) Midstream & Downstream

Significant quantities of additional gas might soon be available to south Gujarat customers of GSPC Gas from the onshore Cambay field operated by Oilex (45%) and GSPC (55%).

PETROWATCH learns commercial gas supplies to GSPC Gas are expected to begin from a single well at the 161-sq km Cambay field anytime between December this year and April 2012. This vertical well was drilled by Oilex “some time ago”, we hear, but is ‘plugged’ and awaiting a gas sales contract.

Gas production could be anything between 100,000cm/d and 500,000cm/d, according to a simulated production profile submitted by Oilex and GSPC to the DGH. Gas from Cambay is to be sold directly to GSPC and then onwards to its retail gas subsidiary GSPC Gas.

“Oilex and GSPC are discussing the finalisation of the sales agreement,” adds a source. “It makes sense to sell gas from the Cambay field to GSPC.

” GSPC gas pipeline subsidiary Gujarat State Petronet has a 14-inch diameter gas pipeline running from Dhuvaran in the Kheda district of Gujarat close to the Cambay field’s gas collection station in a tiny village on the outskirts of Cambay town. “GSPC Gas already has customers in this region,” we are told.

“It’s also much easier to finalise all the necessary agreements there since an affiliate (GSPL) owns the pipeline.” Cambay field gas is likely to be sold at a price derived from benchmarks set by other nearby gasfields.

Heramec for instance sells gas from its Kanawara field to different customers at either of two prices: $7/mmbtu or $9/mmbtu. But gas from the Kathana and Akholjuni fields operated by ONGC is sold to customers at the government-set price of $5.25/mmbtu since August 2010.