Gas reserve is expected in Deendayal block: Minister

Ahmedabad: Confirming last month’s gas find by the Gujarat State Petroleum Corporation (GSPC) in the KG-22 well in the Krishna-Godavari Basin as a “major breakthrough”, the Gujarat Chief Minister, Mr Narendra Modi, said the Deendayal Block is now expected to have gas reserves to the tune of more than 20 trillion cubic feet (TCF) valued at over $300 billion at current price levels.

“Now we are going to create infrastructure for commercial production, including the remaining work of the 1,400 km of the gas grid in Gujarat where pipeline has already been laid for 1,200 kmlength.

“GSPC has invested nearly Rs3,000 crore each in the Deendayal Block and the gas grid. We expect initial commercial production of 8 to 10 million cubic feet (MMCF) per day of gas from the last quarter of 2010,” he told reporters through video conferences at New Delhi and Gandhinagar from the offshore block which he visited along with his Cabinet colleagues today.

KG-22 has shown the potential presence of three TCF of gas at a depth of 6,000 metres, temperatures of 450 degree Fahrenheit and pressures of 12,000 PSI, demonstrating the toughness of job for the 150-200 people involved in drilling, he said.

Mr Modi said the earlier find of the KG-8 well (Deendayal West) indicated a gas flow of 10 million cubic feet (MMCF) per day. Last month, Gujarat submitted the Declaration of Commerciality Report to the Directorate-General of Hydrocarbons. After receipt of the FDP approval, the construction of well-head platform, drilling of developmental wells and onshore gas processing plant will begin.

GSPC had been allotted the K-G exploration block under NELP-III along with Jubilant Enpro Ltd and Geo Global Resources. The block covers an area of 1,850 sq km in the Basin and GSPC as an operator has 80 per cent participating interest. It started drilling operations in July 2004 and has dug 10 wells . Six of these indicated presence of gas reserves, two are neutral and two dry, sources said.

Based on the drilling reports, test results analysed by GSPC and the feedback received from various independent consultants abroad, Mr Modi expressed the confidence that the reserves in the KG Basin’s Deendayal Block of GSPC “will be more than 20 TCF”. The present discovery in KG-22 well substantiates the huge reserve potential of Deendayal Block. So far, GSPC has drilled wells only in Deendayal North and West. Deendayal East, for which drilling is planned, is seen as having the maximum potential of gas, he added.

Drilling at KG-22 started in August 2007, and it was drilled up to 6,007 metres depth. Out of the three zones, the third one, between 4,652 and 4,672 metres, has produced huge amount of gas to the tune of 27.3 MMCF per day, the highest gas flow tested in this Block by GSPC.

GSPC had also acquired 300 acres of land in Kakinada in Andhra Pradesh for on-shore gas processing plant and has booked the capacity in the Reliance Industries Ltd’s pipeline for transportation of 10 MMCF of gas to Gujarat. As and when the production goes up, GSPC would explore possibilities of putting a new pipeline or swapping of gas.

So far, 61 exploration blocks and fields have been awarded to GSPC, including the 11 it received in NELP-VII round of bidding recently. GSPC also has two exploration blocks in Egypt, three in Yemen, two in Australia and one in East Timor.

GSPC has put up 1,200 km of gas grid covering 14 of 26 districts of Gujarat at a cost of Rs 3,000 crore for transportation of about 18 million standard cubic metres per day of gas. It caters to 30 major industrial and power sector customers and 300 small and medium industries apart from 2.5 lakh domestic customers.

Gujarat has India’s both LNG terminals with a capacity of 17.5 million tons at Dahej and Hazira and two more are being planned at Mundra and Pipavav.

Gujarat is also progressing with a master plan for establishing city gas distribution (CGD) projects across for 20 lakh households acros