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Cairn India to invest US$ 100 mn in Rajasthan gas fields

Business Standard:  October 27, 2016

New Delhi: Vedanta group company Cairn India plans to invest $100 million with focus on Rajasthan gas fields.

The company is targeting to increase gas production to 40-45 million standard cubic feet per day (mmscfd) by 2017 and to 100 mmscfd by 2018/19.

The capital investment is estimated for FY17 with 80 per cent focus for development of Raageshwari Deep Gas (RDG) project and completion activities of Mangala Enhanced Oil Recovery (EOR), a company spokesperson said.

"The project is being developed in a phased manner to realise capital efficiency while maintaining production growth and is progressing on track. As part of Phase-1, eight out of the 15 wells have been brought online and will start adding to the production as per plan. Rest of the wells are also planned to be brought online by December 2016," the spokesperson said. 

Contract for low-cost augmentation of the existing facility will be awarded shortly. Tendering for enhancement of existing pipeline capacity is in advance stage and contract is expected to be awarded during Q3 FY17, he said.

Completion of Phase-1 is expected to increase the gas production to 40-45 mmscfd by end of H1 CY17. For Phase-2, tendering activity for new gas processing terminal and drilling rig is ongoing according to plan. Completion of Phase-2 will increase the gas production upwards of 100 mmscfd and condensate production to about 5,000 barrels of oil equivalent per day.

Since early 2013, the Rajasthan joint-venture (JV) is selling Raageshwari gas and delivering into GSPL’s Gujarat Grid and fertiliser units. GSPL, along with its JV partners, is laying a pipeline up to Barmer for offtaking higher volumes of natural gas through its Mehsana Bhatinda pipeline.

Gas production from Rageshwari increased from 28 mmscfd in Q1 FY17 to 33 mmscfd in Q2 FY17, amounting to three bcf (billion cubic feet), helped by initial well productivity post conclusion of the hydro-frac campaign. Total gas sales were 1.6 bcf, at an average rate of 17.2 mmscfd. In-line with the focus on improving productivity and enhancing recovery through technology adoption, the expected ultimate gas recovery has increased by 26 per cent compared to the initial estimates. "While the JV wishes to ramp-up gas sales from RGD from current volutes, it is in discussion with the government and looks forward to a higher allocation," the company said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.