ONGC to invest $4 bn in KG block

NEW DELHI: State-owned Oil & Natural Gas Corporation (ONGC) plans to invest $4 billion to develop the ultra-deepwater gas find and produce about two trillion cubic feet (tcf) of gas from its Krishna-Godavari basin block. “The commerciality report regarding the block will be submitted to the directorate general of hydrocarbon (DGH) on July 16,” said a senior official. DGH,is the custodian of the country’s hydrocarbon assets.

According to company officials, ONGC estimates an in-place reserve of about 4tcf of gas in the ultra-deepwater areas (UD-1), which 56% can be commercially produced.

ONGC has so far made 10 gas discoveries in the block including UD-1. The company holds 90% equity in the project while the remaining 10% is held by Cairn India.

ONGC had approached the DGH to appraise its finding after it discovered hydrocarbon in the block in December 2006. The directorate gave its nod to the operator to conduct an appraisal programme in early 2008. ONGC completed the same on schedule and found that the production of gas from the field was commercially viable. The commerciality will be pproved by DGH soon, allowing the operator to prepare a field development plan. The field is expected to start production by 2014-15. UD-1 discovery lies at a depth of 2,841 meters.