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McDermott confirms start- up of ONGC deepwater well
PROJECTS & COMPANIES
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) has brought its first deep- water natural gas well at the KG-DWN-98/2 block on stream.
McDermott International, which was hired by ONGC in October 2018 to provide end-to- end services for the project, said on March 31 that first gas was delivered ahead of schedule by tying back a single well to the existing Vash- ishta facility. The announcement confirmed ear- lier reports that ONGC had begun producing around 250,000 cubic metres per day from the well and was examining plans to increase this to 750,000 cubic metres per day. The well is located in 1,300 metres of water, which is the deepest water depth of any of ONGC’s wells, the service provider said.
“Production from a deepwater well in less than 14 months is an outstanding achievement for the deepwater exploration and production industry,” McDermott’s senior vice-president for Asia-Pacific, Ian Prescott, said in a statement.
McDermott was awarded an integrated subsea package for the block, which included the supply of 26 deepwater trees and the instal- lation of subsea umbilicals, risers and flow- lines (SURF).
Prescott said: “In line with the ‘Made in India’ approach for the 98/2 project, a substantial amount of engineering and project management has been led from McDermott’s operations in Chennai. This local approach is a new initiative inthedeepwatersubseaspaceforMcDermott.”
The 98/2 block lies in the Krishna-Godavari (KG) Basin and is the focus of a $5bn investment programme that aims to lift overall gas produc- tion from a projected 25bn cubic metres in fiscal 2019-2020 to around 35 bcm in 2023-2024.
The block is an ultra-deepwater, high-tem- perature and high-pressure (HTHP) field, which will receive marketing freedoms when it comes online to reflect the cost of develop- ment. However, alongside the benefits have come challenges. Reports emerged in Novem- ber 2019 that owing to higher reservoir com- plexity and development challenges, ONGC might produce as much as 20% less from the block than originally projected.
Local daily Mint quoted unnamed company sources as saying management had reduced its guidance for the block from an estimated 38-40 bcmbyfinancialyear2023-2024to32-34bcm.™
ONGC calls for an end to Indian gas price controls
POLICY
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) has called on the government to remove price controls on locally produced nat- ural gas.
The chairman of India’s largest oil and gas producer, Shashi Shanker, told the Economic Times on April 2 that full marketing freedom was necessary to prevent certain projects from being mothballed.
“There is an urgent need to revisit the gas price formula and the price ceiling for gas from difficult fields. If we want to really raise domes- tic production and move towards a gas-based
economy, we must permit a free market and do away with the gas price formula,” Shanker said.
His comments come after the govern- ment slashed prices for conventional gas production from $3.23 per million Brit- ish thermal units ($89.34 per 1,000 cubic metres) to $2.39 per mmBtu ($66.11 per 1,000 cubic metres) on April 1.
Production from challenging fields, which receive a price premium, had its price cut from $8.43 per mmBtu ($233.17 per 1,000 cubic metres) to $5.61 per mmBtu ($155.17 per 1,000 cubic metres).
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w w w . N E W S B A S E . c o m Week 13 02•April•2020