State-run ONGC has apprised the upstream oil regulator of its intent to take over the equipment and infrastructure at the soon-to-be-exhausted Panna-Mukta-Tapti (PMT) fields, the PSU’s joint venture with Reliance Industries and BG India. ONGC plans to deploy the facilities at its promising Daman project, but, curiously, wants them for free.
As per the production sharing contact for PMT, once the fields dry up, the processing facilities can be taken over by the government or its nominee after paying the investors/project partners “all the obligations, including the commissioning charges”. PMT fields are seen to dry up by late 2015 or early 2016.
With ONGC seeking to take over two process platforms (TCPP and TPP), a flare platform (TFP) and two export pipelines, it is yet to get the partners agree to this, as the PSU is disinclined to compensate them.
This, sources said, has made the petroleum ministry to intervene and urge the firms to resolve the issue amicably amongst them.
Taking over the facilities at PMT would help ONGC save both cost and time. Creating new infrastructure of the kind at Daman could cost the PSU around $700-800 million and take 12-18 months.
“ONGC made a proposal through Directorate General of Hydrocarbons (DGH) to take over the processing equipment once production from Tapti fields are over. The joint secretary concerned at the petroleum ministry held a meeting on September 17 with all the stakeholders on the issue and asked them to reach at an amicable settlement on the charges to be paid by ONGC,” a government official privy to the development told FE. In fact, the ministry has been seized of the matter for close to three months. The JV partners anyway are contractually bound to dismantle the facilities by 2019.
ONGC wants to use the PMT hydrocarbon facilities for processing oil and gas from its Daman project that is poised to become one of its prolific assets. The project in Mumbai offshore comprises a cluster of four fields — C-24 and B-12 (11/13/15). Together, these fields are capable of producing about 10 million metric standard cubic metres per day of gas.
Production is expected to commence by August 2016.
ONGC’s current gas output is around 60 mmscmd.
Of the two export pipelines at PMT, a 20-inch TCPP platform to ONGC’s 42-inch Bassein-Hazira line, while the second — an 18-inch pipeline — connects to ONGC’s 36-inch Bassein-Hazira pipeline network with a subsea provision for connecting to another 42-inch pipeline.
The production from the Tapti field is currently hovering around 500 barrels of oil and 1.05 mmscmd of natural gas.
Currently, about 25 mmscmd of ONGC’s gas output comes from the Bassein field which has been in production since 1988 in the Arabian Sea.
Projects such as Daman would add up to the incremental production for the firm and also make up for the falling hydrocarbon production from decades-old mature fields.
The PSU has taken up cluster development of projects to make small discoveries economically viable. The Daman project has gas reserves of about 35-36 billion cubic metres (bcm), of which 60-70% is recoverable. The project is also expected to produce about 9,286 barrels per day (bpd) of rich condensate that is used to produce value-added products such as naphtha, diesel and kerosene.
In the PMT consortium, ONGC owns 40% while RIL and BG India, the operator, own 30% each.
