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All not well with Gail-ONGC gas deal

By Jyoti Mukul in New Delhi
August 08, 2005 12:40 IST
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Gail (India) Ltd has sought the intervention the ministry of petroleum and natural gas to work out a commercial arrangement with Oil and Natural Gas Corporation for the purchase of natural gas from C-22 and C-24 marginal fields off the west coast.

Gail executives told Business Standard, the petroleum ministry had decided these fields would sell gas to the company, which would examine the feasibility of taking gas through its planned Dahej-Uran pipeline. Since the fields were not cost effective, the ministry decided that ONGC would be allowed to sell gas at market rates.

Gail had also sought details of technical issues and the unit cost of gas at the landfall point inclusive of offshore transportation charges so that the marketability of gas could be assessed.

Gail had made the request about a year back but even after several reminders, ONGC had not furnished the information, said company executives.

While Gail was pushing for early monetisation of gas from the fields, there were reports that ONGC is in talks with private companies to sell gas.

ONGC has marginal gas fields of C-22, C-24, C-39, C-23, C-26, B-12 and North Tapti, which will be sequentially exploited for sustained gas production.

It is estimated that these fields will give 2 million standard cubic metres of gas a day for 14 years.

ONGC has already asked Engineers India to prepare a report on the feasibility of the fields.

It plans to sell gas directly from these fields to power companies.

How these fields will be developed will be known after the submission of the report following which feasibility studies will be conducted.

The schedule and the companies to be approached were likely to be worked out later, said an official.

Tata Power had, in 2003, shown interest in buying gas stranded in the marginal fields for its Trombay plant. It had held discussions with ONGC but without any results.

For oil's sake

  • The petroleum ministry has decided these fields will sell gas to Gail, which will examine the feasibility of taking gas through its planned Dahej-Uran pipeline
  • Since the fields are not cost-effective, the ministry has decided that ONGC will be allowed to sell gas at market rates
  • While Gail has been pushing for early monetisation of gas from the fields, there have been reports that ONGC is in talks with private companies to sell gas
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Jyoti Mukul in New Delhi
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