GSPC seeks 20 sq km extension in KG basin

Even as work at Gujarat State Petroleum Corporation's (GSPC) Deen Dayal West field is going ahead at full pace, the state-owned company is pressing the Central government to grant a 20 sq km extension to its DD West discovery.

"GSPC has written to the Ministry of Petroleum and natural gas seeking 20 sq km extension to its DD West discovery beyond the KG-OSN-2001/3 boundary," said a government source.

The source said that there was a provision in the production sharing contract that allows operators to extend the development area.

"This is a normal practice for exploration companies. The proposed extension can help in adding further reserves to the
discovery," the source said.

According to officials, located directly south of Deen Dayal West, the 20 sq km incremental area is close to DD West, where gas reserves have been found.

"Some of the area in the KG basin has been allocated to ONGC, but GSPC is still waiting for grant of extension," a GSPC official said, requesting anonymity, adding that on receiving the grant, the company was likely to drill at-least one well to prove reserves.

After the initial claims and euphoria that gas reserves in the area were in excess of 20 trillion cubic feet (tcf), GSPC has now settled for the more conservative estimate of 2 tcf reserves. GSPC aims to produce around 6 million metric standard cubic metres gas per day from DD West.

"Commercial gas production from DD West is expected to commence in June 2013," according to GSPC.

Officials stated that work at DD West was progressing well. They said that construction of the well-head platform was complete, while contracts had been awarded for building the process platform, sub-sea pipeline and onshore gas terminal.