ONGC spuds first well on $5 bn KG project

State-owned explorer Oil and Natural Gas Corp (ONGC) on Sunday kick-started its $5.07 billion oil and gas project in the Krishna-Godavari (KG) oil and gas field in the east coast targeting gas production by the end of 2019.

ONGC has planned to drill a total of 34 wells in the KG-DWN-98/2 (or KG-D5) block in the Bay of Bengal.
Minister of petroleum and natural gas and minister for skill development and entrepreneurship Dharmendra Pradhan flagged off the spudding of the well from drillship Platinum Explorer, 35 km off the Andhra Pradesh coast, ONCG stated in a release.
The deepwater well, KDG-A, one of the 34 wells planned under this mega project, has a target depth of 2,346 meters, under a water depth of 518 meters.  The well is expected to produce around 5,000 barrels of oil per day (bopd) when put to production.
This ambitious project of ONGC is going to be a major contributor towards achieving the target of reducing nation’s hydrocarbon import dependence by 10 per cent by 2022. The project would cumulatively produce around 25 MMT of oil and 45 BCM of gas with peak production of 78,000 barrels per day of oil and 15 MMSCMD of gas.
ONGC expects to bring first gas from this project to market by 2019-end and oil by 2020.
Pradhan emphasised the need for better project management to ensure that targets are achieved even as he said the union government’s strong commitment towards Andhra Pradesh, which is emerging as a major oil and gas hub of India.
“It is our endeavour to make these major investments in oil and gas sector bring prosperity to the people of Andhra Pradesh”, he said.
Pradhan also said that oil sector projects like ONGC’s 98/2, would generate large employment opportunities and leverage local services and materials wherever possible as per the ‘Make in India’ policy.
It may also be noted that the project KG DWN 98/2 involves some of the most advanced oil field technologies in drilling and completion of 34 subsea wells, laying about 425 km of pipeline and 150 km of control umbilical in water depths varying from 300 to 1,400 meters. There will be an offshore process platform for processing and evacuating 6.5 MMSCMD of gas. Balance 5.75 MMSCMD gas will be transported through ONGC’s existing sub-sea infrastructure and facilities created at onshore terminal of Odalarevu in Andhra coast. Floating production, storage and offloading vessel (FPSO) will also be deployed in water depth of 413 meters to process the oil and gas.
The project envisages a CAPEX of $5.07 billion and OPEX of $5.12 billion over field life of 16 years.
After successfully commissioning of its first deepwater project S1 Vasishta in eastern offshore in March 2018 (which would be yielding about 4.3 MMSCMD of gas), ONGC’s flagship project from NELP block KG-DWN-98/2 in the deepwater of eastern offshore is now being readied for development. The project 98/2 would start yielding oil and gas from 2019 end.
Thirty four wells will be drilled under this project. Of these 34 wells, 15 are oil producing, 8 are gas producing and 11 are water injecting wells.
Peak production of associated natural gas from Cluster 2A of this project will be 3 MMSCMD and oil production at 78,000 bopd with a 15 year profile while peak production of non associated natural gas from Cluster 2B will be 12.25 MMSCMD with a 16 year profile.