Explained: The Importance Of ONGC Commencing Commercial Production From Its Deepest Gas Field In KG Basin

State-run Oil & Natural Gas Corporation (ONGC) has achieved a major milestone for its flagship KG-DWN-98/2 deep-water block in Krishna-Godavari basin in Bay of Bengal.

Prime Minister Narendra Modi on Saturday (12 November) dedicated the U-field onshore facilities of KG-DWN-98/2 Block to the nation, kick-starting natural gas production from the prolific offshore asset.

With the commissioning of the onshore facilities, the U-field has been monetized, earning revenue for the oil major.

U-Fields

The U-field is part of ONGC’s much-delayed KG-DWN-98/2 Cluster-2 development project, which envisages extracting hydrocarbon from deep waters of about 1.5 km water depth on India’s east coast.

U-field is the deepest gas discovery of the project, with a gas production potential of about 3 Million Standard Cubic Meters Per day (MMSCMD).

The first gas well of the U-field, U-3-B, was monetized in a global record time of 11 months.

Presently, U-fields are producing around 1.6 MMSCMD of gas per day, which is expected to increase to 3 MMSCMD.

Onshore Evacuation

Natural gas produced from these wells are being evacuated through the subsea facilities connected to an onshore terminal at Odalarevu situated in Dr B R Ambedkar Konaseema district of Andhra Pradesh, before being dispatched to users.

The indigenous production will prove to be a boon for development of domestic Exploration and Production (E&P) ecosystem with extensive skill development.

The U-field facility dedicated is the first discovery being monetized, with a CapEx of Rs 2,917 crore, and employment generation of around 3.4 million man-hours.

Gas produced from this project will add significant volumes to ONGC’s production and will be a giant leap towards making India a gas-based economy and energy security.

KG-DWN-98/2 Project

The KG-DWN-98/2 or KG-D5 block, is situated offshore the Godavari River delta in the Bay of Bengal.

It is located 35-km off the coast of Andhra Pradesh in water depths ranging from 300m-3,200m.

The block covers an area of 7,294.6 sq km of the Krishna-Godavari basin. It was operated by Cairn Energy India until March 2005, when ONGC started operating the block.

The block which sits next to Reliance Industries' KG-D6 block, has a number of discoveries which have been clubbed into three clusters — Cluster 1, 2 and 3.

Cluster 2 is being put to production first, with an estimated $5 billion being spent on its development by ONGC.

The Cluster 2 of the Block has been divided into two parts, namely 2A and 2B, which together are expected to produce 23.526 million tonnes of oil and 50.706 billion cubic meters (bcm) of gas.