ONGC and Reliance in discussions with buyers to sell east coast gas

Vastavam web: India’s Oil and Natural Gas Corp Ltd and Reliance Industries Ltd have started discussions with buyers to sell natural gas from their fields in the Bay of Bengal that are expected to start production over the next three years.The plan is to transport the gas from the east coast to the industrial heart belt of western India, an ONGC executive told.

ONGC plans to use Reliance Industries’ 1,375 km pipeline connecting Kakinada on the east coast to Bharuch in Gujarat in the west.Shankar said ONGC is committed to bring east coast gas onstream by 2019 onwards and ramp up production to around 15 million standard cubic metres per day.Reliance built the pipeline in 2009, but has been operating at very low capacity utilisation for several years due to a drastic fall in output from the company’s venture in the Krishna-Godavari basin in the Bay of Bengal.

Billionaire Mukesh Ambani-controlled Reliance Industries and partner BP Plc, which together own three natural gas fields next to ONGC’s in the east coast, has also started discussions with customers to market the natural gas, Sashi Mukundan, BP’s country head and regional president for India, told Reuters last week.Prime Minister Narendra Modi has set a target to increase the share of gas in India’s energy mix to 15 percent by 2030 from below 6.5 percent now.

The government in February approved a plan by Reliance Industries and its partner BP to develop two new fields in the Krishna-Godavari basin.This approval followed an earlier clearance to develop another field called R-Series in the basin.The long term contracts that Reliance-BP joint venture is offering is a sign the companies are committed to fulfilling their contracts, Mukundan said.