ONGC to hire RIL facilities

Oil and Natural Gas Corp is in talks over hiring Reliance Industries' unutilised production facilities on the east coast to quickly start production at its gas finds in the Krishna Godavari basin.

The explorer made nine gas discoveries in its KG block KG-DWN-98/2, which is located next to RIL's flagging KG-DWN-98/3 or KG-D6 block and has plans to club these finds with discoveries in another neighbouring block to begin gas production from 2016-17.

And rather than setting up separate gas processing and transportation facilities, ONGC plans to hire RIL's under-utilised gas gathering station at KG-D6 fields along with pipelines that take the fuel to onland as also its processing plant at Kakinada in Andhra Pradesh, ONGC chairman and managing director Sudhir Vasudeva said yesterday.

He said ONGC had started talking with RIL on the proposal to which RIL seemed to be open. He added, it made a lot of economic sense to share the infrastructure.

RIL has pipelines and other offshore and onshore facilities capable of handling gas output of 80 MSCM per day, it was however producing only around 26 MMSCMD from the KG-D6 lock which was much less than the peak production of 61.5 MMSCMD reached in March 2010.

He added it made sense to all, as RIL facilities were lying redundant  and ONGC was in need of infrastructure to produce its gas.