ONGC's natural gas production at all-time high

 ONGC’s natural gas production has hit an all-time high of about 70-mms-cmd (million standard cubic meters per day) as it doubles up efforts to raise domestic output to curb imports, according to a report in the Economic Times newspaper.

ONGC produced about 64-mmscmd of gas in November last year and this year the output is reportedly close to touching 70-mmscmd. After accounting for internal consumption, gas sales at about 56-mmscmd too are at an all-time high. The growth in output was largely contributed by C-26 Cluster fields, Daman and Vasai East fields in the western offshore as well as sub-sea well S2AB in the eastern offshore.

The output can rise by 24-25 mms-cmd in next 1-2 years if the company gets market price, that will make about 35 billion cubic metres (bcm) of recoverable reserves in discoveries in the shallow sea off Andhra Pradesh on the east and off Gujarat and Mumbai on the west coast blocks economically viable, the report noted. A similar amount of gas can come from onland discoveries and another 5-mmscmd can be added if investment made in redevelopment projects of Mumbai High South, Neelam and B-127 cluster are made economical with the market price, it added.

With a view to reducing dependence on imports for meeting energy needs and cutting greenhouse emissions, India is looking at increasing consumption of natural gas by more than doubling its share in energy basket to 15% in next few years.

ONGC has been constrained by the current $3.36 per mBtu (million British thermal unit) price of gas fixed by the government, which is a third of the rate at which India imports gas in the form of LNG. This price is way below the cost of production for block GK-28/42 in Gulf of Kutch, off the Gujarat coast, Mumbai offshore block MB-OSN-2005/1 and Krishna Godavari basin block KG-OSN-2005/1, which cumulatively can produce about 10-mmscmd.

ONGC had in 2017-18 fiscal produced 23.484-bcm of natural gas, 6.3% higher than 22.099-bcm output in the previous year. This was the highest gas output by the company in five years and the growth rate was higher than the global average of 3-4% year-on-year.

Future plans

The company has stepped up efforts to bring newer fields into production after the Prime Minister set a stiff target of reducing oil import dependence by 10% by 2022. India currently imports over 80% of its oil needs.

ONGC has charted out a plan to double the gas production at 42.7-bcm by 2021-22. It is investing Rs. 57,000-crore – one of the highest investments in the world in gas projects – in the high potential KG-DWN-98/2 project in the Bay of Bengal as well as in developing other discoveries on off the west coast. First gas from the KG-DWN-98/2 project is targeted for end-2019 and peak output is envisaged at 16.56-mmscmd by 2022.