Mumbai offshore gas price fixed at $5.25

In a move aimed at giving a major impetus to boosting energy, state-owned Oil and Natural Gas Corporation (ONGC) has given the green signal for development of a cluster of oil and gas fields in the Western Offshore holding large deposits.

The ONGC board gave its approval to the proposal to develop a cluster of oil and gas fields WO-5, WO-15, WO-16 and B-119/121 fields. The approval came at the meeting held on June 30, according to an official statement issued here. The fields in the Western offshore are situated about 140 km from the West coast of Mumbai and 40 km south of the Mumbai High fields.

The conservative estimates of in-place oil and gas in these fields are 8.57 million tonnes and 11.024 billion cubic metres (bcm) respectively, it said. The fields will produce 2.83 million tonnes of oil and 8.58 bcm of gas over their life.

The statement said that ONGC planned an innovative methodology of converting its first drill ship, Sagar Samrat, of 1973 vintage, into a Mobile Offshore Production Unit (MOPU) and using the same for producing oil and gas from these fields. “This has significantly reduced the capex for the project and has made it economically viable with improved price realisation for oil as well as gas, in spite of considering very conservative estimates of production profile,” it added.

On the other hand, the government has given approval for $5.25 per million British thermal unit (mBtu) as the price of gas produced from ONGC's C-Series fields in Mumbai offshore. ONGC had initially sought $5.5 per mBtu but the Petroleum and Natural Gas Ministry approved a price of $5.25 per mBtu.

Natural gas produced from C-Series fields is sold to GAIL which further markets it to end-users. ONGC began production from C-Series fields last month and is now producing 0.8-1.2 million standard cubic meters (mscmd) gas a day. Peak output of 2.8 mscmd will be reached once all the 15 wells are drilled in the post-monsoon scenario.

The official said the price approved for C-Series field was about a dollar more than the price at which Reliance Industries Limited (RIL) sells gas from the nation's biggest gas field in Krishna Godavari basin off the East coast.

Reliance gets $4.215 per mBtu for the gas it produces from KG-D6 fields off the Andhra Pradesh coast.

Keywords: ONGCReliance


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