OREANDA-NEWS. August 29, 2011. State-owned Oil and Natural Gas Corp (ONGC) is likely to start oil and gas production from Krishna-Godavari basin field GS-15, off the Andhra coast, next month.

While production from some oil wells in the GS-15 field is set to commence from September, ONGC has also drawn up plans to initiate production from its G-1 marginal field in the KG Basin from July, 2012, an official said.

ONGC has asked the Petroleum Ministry to identify users for the gas and approve a price of USD 4.75 per million British thermal units. About 0.19 million standard cubic metres per day of gas would be available for sale from September. The gas availability would go up to 1.52 mmscmd from July next year (subsequent to the G-1 field coming onstream) and to 1.72 mmscmd in 2013-14.

ONGC cited the Oil Ministry's gas pricing order, which had fixed a base price of USD 4.50 per mmBtu for gas from the KG Basin and given an additional USD 0.25 per mmBtu if the gas was coming from offshore fields, to demand a gas price of USD 4.75 per mmBtu.

The official said output will begin to dip from 2013-14 to 1.59 mmscmd and taper to 0.029 mmscmd by 2022-23. The field will also produce 9,400 barrels of crude oil per day.

ONGC envisages the production of 0.982 million tonnes (MT) of sweet or low-sulfur crude and 5.92 billion cubic metres of gas over a period of 15 years from G-1 and GS-15.

G-1 is located 28 kilometres off the Amalapuram coast, in water depths ranging from 135 to 500 metres, while GS-15 is located 5 km from the coast in the KG Basin.

The official said G-1 and GS-15 are two marginal fields that were awarded to ONGC on a nomination basis. The two acreages are being developed together at an estimated cost of Rs 1,200 crore.

According to the gas production profile, G-1 and GS-15 will produce 1.52 mmscmd in 2011-12, 1.72 mmscmd in 2012-13, 1.59 mmscmd in 2013-14, 1.36 mmscmd in 2014-15, 0.99 mmscmd in 2015-16, 0.87 mmscmd in 2016-17, 0.87 mmscmd in 2018-19, 1.11 mmscmd in 2019-20, 0.95 mmscmd in 2020-21, 0.71 mmscmd in 2021-22 and 0.029 mmscmd in 2022-23.

The official said unless the Petroleum Ministry quickly approves the price of gas and identifies users, ONGC may end up flaring gas from G-1 and GS-15 next month. "The field is primarily an oil field and gas is produced as associated gas. So if there are no customers, we will produce oil and flare gas," he said.