OPINION: India is poised for a sizeable production boost from some of its strategic deep-water fields in the prolific Krishna Godavari basin, offering a response to growing demand for gas along the country’s eastern coast.
State-controlled Oil & Natural Gas Corporation (ONGC) recently said that it has kicked off gas production from its U deepwater field in the KG-DWN-98/2 asset, which is likely to achieve a peak gas production of 3 million cubic metres per day.
Similarly, private sector giant Reliance Industries and its partner, UK supermajor BP, are expected to initiate gas production within weeks from the MJ deep-water field in the KG-D6 asset, with peak production expected to be up to 12 MMcmd.
Increased gas production from the strategic deep-water assets near the country’s eastern coast comes as a tremendous relief for India’s hydrocarbon sector, which has seen its production decline over the years.
While India’s west coast region is home to some of the nation's largest offshore oil and gas fields and has an impressive pipeline infrastructure, along with multiple liquefied natural gas terminals, the eastern region has been lagging far behind on the country’s hydrocarbon map.
Improved gas flows near the country’s east coast region could potentially aid in developing gas-based infrastructure across the value chain, whilst also leading to increased consumption for key industries and refineries.
It is also likely to position Kakinada — in the state of Andhra Pradesh — as one of the most prominent oil & gas hubs in India.
Along with the likely rise in domestic production, the monetisation of technically challenging MJ and U fields, is a shot in the arm for India’s deep-water industry, which lacks experience along with technical expertise.
Analysts and industry insiders predict that once gas production goes up multi-fold from the Indian east coast assets, it could feed back into a big increase in deepwater exploration and production acivity in the region, as market opportunities and infrastructure along and near the east coast.
Despite continued challenges and project delays being faced by ONGC in monetising the multiple deepwater gas discoveries in the KG basin, the east coast is finally confirming its potential to help India to replace dwindling gas production volumes from its ageing west coast fields.
(This is an Upstream opinion article)