GSPC offshore block production may be put off to next year
PRATIM RANJAN BOSE - Business Line
KOLKATA, SEPT. 21:
Green hurdle may postpone production from Gujarat State Petroleum Corporation (GSPC) operated KG offshore asset to January-February 2014, according to sources.
The $1.8-billion project, with estimated peak output of 5.7-8.6 million metric standard cubic metres of natural gas every day (mmscmd), was expected to be operational in June this year. Though GSPC made progresses in setting up the extraction facilities in the Bay of Bengal, production plan was hit due to delay in getting clearances for laying 10 km gas pipeline on the peripheries of Coringa Sanctuary and, commissioning of the onshore processing terminal at Yanam in Andhra Pradesh.
According to sources, the Gujarat Government-owned integrated oil and gas major has recently received approval from the wildlife authorities. However, coastal regulatory and forest clearances are still awaited.
The National Coastal Zone Management Authority had heard the company’s case on September 19. However, results of the meeting are not known.
According to sources, the company has already readied four wells out of the scheduled 16. Work for sub-sea pipelines are also over before the monsoon sets in.
The GSPC-operated consortium (GSPC 80 per cent, Jubilant 10 per cent, GeoGlobal 10 per cent) will initially bring two wells, with an estimated production capacity of approximately one lakh standard cubic metre a day, into production. The rest will be brought into production in a phased manner.
If this slips to April, it'll be right on time for the higher national regulated price for natural gas, as was likely the schedule goal once the price increase timetable
The dialog in the press on what this new price will be has been quiet recently, my guess it'll be in the $8/mmbtu range, with a caveat on RIL/BP production from D6, that they must continue delivering from legacy wells at $4.20/mmbtu, and the new price is only allowed from the new wells and approved overhauls.