December is the latest deadline set by the state-owned Gujarat State Petroleum Corporation (GSPC) for gas production to start at its ambitious and much-delayed KG Basin project.
Commercial production of gas from Deen Dayal field in KG basin was expected to commence in June 2013, but the project suffered another delay due to environmental issues. However, officials claim the issue has been sorted out, and work has commenced at full-steam at the site.
“December is the target. We are confident that gas will start flowing by the end of this year,” said an official, requesting anonymity. GSPC managing director Tapan Ray could not be reached for a comment despite repeated attempts.
Officials said construction of the wellhead platform has been completed, while works related to modular platform rig, process-cum-living quarters platform, sub-sea pipeline, and onshore gas terminal, are in advanced stages of construction, and will be completed in the next month or so.
GSPC has so far spent more than $1.7 billion on the ambitious Deen Dayal project, as against the estimated total project cost of $ 2.1-2.2 billion. The state-owned company is expected to produce around 2 to 2.5 million standard cubic metre (scm) of gas from Deen Dayal West block initially. The production is expected to rise to 5.2 million scm in the next couple of years.
The company was hoping to get around $5.75 per million metric British thermal unit (mmbtu) of gas produced from its field.
However, with the central government recently approving higher gas prices from April 2014, GSPC can expect to get around $8 or even more per mmbtu. It was way back in June 2005 when CM Narendra Modi had announced the gas discovery by GSPC.
The gas production was originally planned to start in 2008, but the project ran into one delay after another. The deadline was then extended to 2010, then again to 2011, and finally to June 2013, but even it was missed due to lack of forest and wildlife clearance.
Officials, however, are confident of meeting the December 2013 target.