Billionaire Adani Among 400 Bidders for India City-Gas Licenses
Billionaire Gautam Adani’s gas retailing unit is among firms that submitted 400 bids for the 86 areas the Indian government offered in its latest auction for city-gas licenses. Adani Gas Ltd. bid for 32 licenses, Chief Executive Officer Rajeev Sharma said Wednesday, while its joint venture with Indian Oil Corp. bid for 20. A unit of state gas utility GAIL India Ltd. bid for “close to 30 cities,” the Press Trust of India reported, without saying where it got the information. India Gas Solutions, a joint venture between BP Plc and Reliance Industries Ltd., scrapped its plans to participate, according to PTI. “We have got unprecedented response,” Petroleum & Natural Gas Regulatory Board Chairman D.K. Sarraf said by phone, declining to identify the bidders. “This will be a big boost to India’s effort toward increasing gas consumption.” Evaluation of the bids in the ninth round of auctions will run from July 12 to July 18, and licenses are expected to be awarded by October, the PNGRB said Tuesday. The regulator awarded a combined 56 licenses out of 106 areas offered in previous rounds since 2009. India is seeking to double the share of natural gas in the country’s energy mix to 15 percent by 2030, while slashing emissions by a third. The country, which the World Bank said in 2016 was home to 14 of the 30 most polluted cities on the planet, is building gas pipelines and new import facilities to increase use of the fuel. The areas in this week’s auction cover almost a quarter of the nation and are aimed bringing gas to 29 percent of its 1.3 billion people. The licenses in the latest round are expected to fetch investments worth 700 billion rupees ($10.2 billion) to develop gas infrastructure, the PNGRB has said. That is about four times the cumulative spending in the sector through March 31, according Crisil Ratings Ltd., the local unit of Standard & Poor’s. Alex Anzalone Jersey
LPG subsidy a distortion, provide fuel-agnostic cooking sop: NITI Aayog
The NITI Aayog has suggested to the Ministry of Petroleum and Natural Gas that eligible beneficiaries receiving subsidy on liquefied petroleum gas (LPG) should rather be given a ‘cooking subsidy’ through direct benefit transfer (DBT). While 4.6 crore LPG connections released under the Pradhan Mantri Ujjwala Yojana (PMUY) have led to smoke-free kitchens in rural India, the NITI Aayog in a note to the ministry said the ‘subsidy’ attached to LPG is creating distortions in adopting cleaner forms of fuel. The note advocates that piped natural gas (PNG) is the most efficient form of fuel in urban areas and biogas should be the preferred option in rural areas given availability of raw materials. The think-tank envisages that beneficiaries should be provided cooking subsidy through the DBT and the freedom to decide on the cooking fuel. As per the current practice, customers eligible for subsidy buy LPG cylinders depending on the prevailing market price and the subsidy amount is then remitted to beneficiaries’ bank accounts. However, no such subsidy is provided for fuels other than LPG and kerosene. The note compares pricing and carbon-dioxide emissions for various forms of fuel such as biomass, biogas, PNG, LPG and kerosene. However, the response of the petroleum ministry on the suggestion by the NITI Aayog could not immediately be ascertained by FE. Launched in May 2016, the PMUY was initially aimed at providing clean cooking fuel to 5 crore women from households classified as the below poverty line under the Socio Economic Caste Census 2011 over a period of three years. A sum of Rs 8,000 crore was allocated for the scheme to start with. However, given the success of the scheme, finance minister Arun Jaitley announced in the latest Budget to allocate an additional Rs 4,800 crore and increased the target to 8 crore beneficiaries. The scope of the scheme has also been widened. Under the PMUY, the government bears a burden of Rs1,600 per connection and almost an equal amount is borne by beneficiaries, who either pay upfront or take a loan from the OMCs, the programme executors. The loan is repaid by beneficiaries by letting go the subsidy with each refill. However, to push the refill rate, OMCs earlier this year announced that they will defer loan recovery by six months for every existing as well as new beneficiaries. The NITI Aayog believes that PNG will be a better option even in tier-II, tier-III and large villages and the Petroleum and Natural Gas Regulatory Board should promote the cooking fuel in these areas by allowing more number of distributors. The regulator on Tuesday received more than 400 bids for 86 geographical areas (GAs) offered in the ninth city gas distribution (CGD) licensing round. These GAs will cover 24% of the country’s area and 29% of the population. In other words, they cover 174 districts across 22 states and Union Territories. Currently, 91 GAs with 24% of the population have piped natural gas (PNG) facility. A licence winner under the CGD round will have the exclusive right to offer PNG and CNG in a particular GA for eight years, extendable by two years. However, according to a person close to CGD licensing, PNG will not be economical for distributors in small towns and villages. “LPG and PNG will co-exist,” said the person, adding that it cannot be ruled out that cities in future will only have PNG, and LPG will primarily cater to villages. Eric Hosmer Womens Jersey
RIL plan to supply jet fuel to Mumbai airport using OMC pipelines faces hurdles
State-owned fuel marketers are pushing back against a regulatory suggestion to allow Reliance Industries Ltd (RIL) to use their pipelines to sell jet fuel at the Mumbai airport. Currently, the three public sector oil marketing companies — Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL) and Indian Oil Corp. Ltd—fuel all aircraft at Mumbai’s Chhatrapati Shivaji International Airport through two pipelines from their refineries. RIL had written to the Petroleum and Natural Gas Regulatory Board (PNGRB) in November 2016 to declare these pipelines “common carriers” which would allow it to access them. On 4 May this year, the board suggested the same in a notice seeking public opinion, but OMCs are not giving up without a fight. BPCL and HPCL say PNGRB did not consult them, and does not have the authority to impose any direction. “Though BPCL owns the pipeline, PNGRB has not heard BPCL’s view on the matter. The ATF pipeline is outside the scope and purview of the PNGRB Act and as such, PNGRB does not have the jurisdiction to declare the ATF pipeline as a common carrier,” said BPCL in its reply. A common carrier system implies that the capacity in a pipeline over and above the owner’s own requirement can be made available to any other entity if not fully utilized by the owner. This can be done on an annual contract basis. Officials from HPCL and BPCL said on the condition of anonymity that if need be, they will have to take the legal route on this matter. RIL and BPCL did not reply to an email sent. HPCL declined to comment. A 2002 government notification says a pipeline less than 300 km is granted right of use treating it as a “captive pipeline”. “Therefore, pipelines such as BPCL’s ATF pipeline which is 15 km long (being a pipeline of a length of less than 300 km) is a captive pipeline, a dedicated pipeline and therefore outside the scope and ambit of a common carrier and beyond the jurisdiction of the PNGRB,” said BPCL in its reply to PNGRB. At present, the entire ATF demand of 1.4 mmtpa (million metric tonnes per annum) at the Mumbai airport is met by the three OMCs. Indian Oil, along with BPCL and HPCL, has a joint venture company called Mumbai Aviation Fuel Farm Facility Pvt. Ltd for the ATF supply. Airlines at the Mumbai airport consume more than a fifth of the India’s total jet fuel requirement. RIL plans to ship ATF from its Jamnagar refinery to the Pirpau Jetty in Trombay, and then use the pipelines to transport the fuel to the airport. RIL in its 2016 letter to PNGRB had said that in the absence of competition, airlines are not able to enjoy the benefit of competitive prices. “The three oil marketing companies are enjoying a monopoly to the exclusion of all other ATF marketing companies (OMCs) in the supply of ATF at the Mumbai airport. This resulted in entry barrier to other authorized ATF suppliers. It has deprived the airlines’ customer of the benefit of effective competition at the airport in effect impacted the cost to passengers at large.” According to the letter, BPCL has 70.8% of capacity remaining in its pipeline. Josh Martin Womens Jersey
Rovuma LNG Phase 1 Development Plan Submitted to Government of Mozambique
Mozambique Rovuma Venture has submitted the development plan to the government for the first phase of the Rovuma LNG project, which will produce, liquefy and market natural gas from the Mamba fields located in the Area 4 block offshore Mozambique. The plan details the proposed design and construction of two liquefied natural gas trains which will each produce 7.6 million tons of LNG per year. ExxonMobil will lead construction and operation of natural gas liquefaction and related facilities on behalf of the joint venture, and Eni will lead construction and operation of upstream facilities. As the Rovuma LNG project progresses, every effort will be made to actively build the local workforce and supplier capabilities in Mozambique. “We are excited to be progressing the Rovuma LNG project, working with the government and leveraging the expertise and capabilities of all of the partners,” said Liam Mallon, president of ExxonMobil Development Company. “The Rovuma LNG Project is moving forward swiftly,” said Stefano Maione, Eni’s executive vice-president for the Mozambique Program. “The size of the project makes it not only an important investment in the country, but also supports economic growth and opens new opportunities for Mozambicans.” A final investment decision by the Area 4 joint venture parties is scheduled in 2019, with LNG production expected to commence in 2024. Marketing activities are progressing, with negotiations on sales and purchase agreements underway, targeting completion in parallel with the development plan approval process. Rovuma LNG is operated by Mozambique Rovuma Venture S.p.A., an incorporated joint venture owned by ExxonMobil, Eni and CNPC, which holds a 70 percent interest in the Area 4 concession alongside its partners Galp, KOGAS and Empresa Nacional de Hidrocarbonetos E.P. (ENH), each of which hold a 10 percent interest. Charles Mann Jersey
Does petroleum ministry consider itself ‘God’, asks SC
Does the Petroleum Ministry consider itself to be ‘God’ or a ‘super government’ and think that the “unemployed” judges are at their mercy, an anguished Supreme Court bench observed on Monday. The scathing remarks by a bench of Justices Madan B Lokur and Deepak Gupta came when the top court was informed that the Ministry of Petroleum and Natural Gas (MoPNG) had only yesterday apprised the Ministry of Environment, Forest and Climate Change (MoEF&CC) about the issue of ban on import of pet coke, which is used as industrial fuel. The court, which was hearing a matter relating to air pollution in the Delhi-National Capital Region (NCR), slapped a fine of Rs 25,000 on the MoPNG for “laxity”. The top court also imposed a cost of Rs 0.1 million on the Delhi government for not filing a status report giving a time-line for removal of traffic bottlenecks on several corridors in the city. The strong observations against MoPNG came when Additional Solicitor General (ASG) A N S Nadkarni, appearing for the Ministry of Environment, Forest and Climate Change (MoEF&CC), told the bench that they had received a response from the MoPNG on the issue only yesterday. “Is MoPNG a God? Are they God? They would respond whenever they want? Tell them to change their name from MoPNG to God.” “Is MoPNG a super government? Is it above the Government of India? What is the status of MoPNG, tell us. Why are they not complying with any order,” the bench asked. When the ASG said their affidavit was ready and he should be allowed to file it during the day, Justice Lokur shot back, “If they (MoPNG) do not feel like complying with the orders, they do not comply, and think that the unemployed judges of the Supreme Court will give them time. Are we supposed to be at the mercy of MoPNG?” The bench allowed the ASG to file the affidavit during the course of the day, but said “we are surprised by the attitude of the MoPNG in taking their own time in responding to the MoEF’s communication. The delay is entirely because of the laxity of the MoPNG”. It said if the cost of Rs 25,000 is not deposited by the MoPNG with the Supreme Court Legal Services Authority on or before July 13, it would enhance the amount of fine. The bench then fixed the matter for hearing on July 16. During the brief hearing, advocate Aparajita Singh, assisting the court as an amicus curiae, said the MoPNG was supposed to respond to the communication on the issue of ban on import of pet coke and supply of natural gas. Regarding the Delhi government not filing a status report on removal of traffic bottlenecks in the national capital, the bench said that as per its May 10 order, the Delhi government was supposed to file it within six weeks but they have not filed it yet and no lawyer on their behalf was present during the proceedings. The court referred to the orders passed by it and said it appeared that Delhi government was not concerned about them. On May 10, Delhi government had told the court that six task forces have been set up to look into the issue of traffic bottlenecks in several corridors in Delhi. It had said that such corridors were classified under categories A, B and C and steps were being taken with respect to 11 out of 28 corridors falling under category A. During the hearing today, the amicus told the bench about the issue related to the tenure of the court-mandated Environment Pollution Control Authority (EPCA). On being asked, the ASG told the bench that EPCA’s tenure was scheduled to end on July 4 this year which has been extended by three months through a government order. The court was hearing the matters arising out of a PIL filed in 1985 by environmentalist M C Mehta who had raised the issue of air pollution in the Delhi-NCR. Johnathan Joseph Jersey
Gadkari bets on alternative fuels to ease crude import strain
Union minister Nitin Gadkari is betting big on alternative fuels that will not only cut India’s burgeoning crude oil import bills but also create additional sources of income for farmers, who comprise more than 50 per cent of the country’s population. Alternative fuels are cleaner and cheaper, the Union minister for road transport and highways said. Speaking to , Gadkari said the use of ethanol, methanol, bio-compressed natural gas, dimethyl ether and electricity should be increased as alternatives to crude oil, 70 per cent of which has to be imported. “The benefit of these alternative fuels is that its raw material is available in the country and can be sourced in large quantities from the agricultural sector. It will help farmers increase their income too,” Gadkari said. Speaking about the financial strain crude oil imports place on the country, Gadkari said: “We spend Rs 7 lakh crore annually to import crude oil. The economy is facing challenges – one of which is the heavy crude import bill. The fall in the value of rupee against US dollar is also related to this.” He said increasing production of oil within the country has its limitations, adding that imports comprise 70 per cent of crude oil demands while domestic generation stood at only 30 per cent. “At present, ethanol is received from sugar mills and we mix 5 per cent of it to petrol. This mix can be raised up to 22 per cent but we do not produce ethanol in large quantity. Currently, we get about 4 per cent ethanol after crushing one tonne of sugarcane,” Gadkari said. He said the government has allowed the use of B-heavy molasses for ethanol production to increase its production. “Once ethanol availability goes up, we can blend more of it with petrol,” Gadkari said. He, however, is not satisfied with these small steps. He said he has decided to go for vehicles which are capable of running on 100 per cent ethanol or methanol. “The US and Canada make flex-engines (dual fuel engines) for buses and other transport vehicles. We can use 100 per cent petrol or ethanol in the same engine. The policy is ready for it. Its implementation will start in a few months,” he said. He cited Nagpur as an example where 35 public transport buses are powered by ethanol. The minister said private transport vehicle manufacturer Bajaj Auto was set to launch its vehicles that will have flex-engines. Listing his plans to increase the production of ethanol, Gadkari said the government has decided to make ethanol from cotton straws, rice, bagasse, bamboo and municipal waste. “Once we remove metal, glass and plastic, the rest is biomass, which can be used for ethanol. We have made a policy for it as well,” he said, adding that one of the reasons for Delhi’s air pollution was the burning of straw by farmers. “Once we start making ethanol out of it, no farmer will burn it. And this will decrease air pollution as well,” he said. The minister’s second choice for an alternative fuel is methanol, a product that can be obtained from coal. “We have coal fields and we can produce methanol in abundance. We can sell it at Rs 22 per litre. In China, metha nol sells at Rs 13 per litre,” he said, adding that companies such as Deepak Fertiliser, state-run RCF and Assam Petroleum produce methanol. “Mercedes and Volvo have decided to give 10 buses each for Guwahati and Mumbai as part of a pilot project and these will run on 100 percent methanol,” he said. He added that both ethanol and methanol cause less pollution when compared to petrol and diesel. “While producing methanol, DME (dimethyl ether) gas is also obtained and this can be mixed with LPG and used as a cooking fuel. In the US, 20 percent DME is mixed with LPG. If we do the same here, we can bring down prices by Rs 50 to Rs 60 per cylinder,” Gadkari said. “You have a methanol economy in China and Israel. Why not in India?” Electricity was another option, he said and added that his ministry is in favour of running electric buses. Talking about the mathematics behind the move to go in for alternative fuels, Gadkari said: “Diesel today costs around Rs 60 (per litre), petrol around Rs 80, ethanol is at Rs 47 and methanol at Rs 22. The per unit cost of electricity is Rs 10. The equation is simple and clear.” These alternative fuels, he said, were cleaner and would also bring savings to people. Malik Jefferson Jersey
What is India-Iran oil trade all about?
Iran has always been one of India’s main suppliers of oil, second only to Iraq and Saudi Arabia, with exports that totaled more than 27 million tons last year. The figures make India Iran’s biggest buyer after China, and as a result, a target for the U.S. which has declared a campaign to “isolate Iran” after the Trump administration withdrew from the multilateral nuclear deal. For India, which has been told along with other buyers to take oil imports to “zero” by the cut-off date of November 4, its decisions on procuring Iran oil this point onwards is not so much about securing energy as it is about securing India’s standing in the world. If it rejects U.S. pressure, it risks sanctions as well as incurring the displeasure of its all-powerful friend and defense partner. If it yields, it risks its relationship with traditional partner Iran, access to important trade routes through Chabahar and the International North South Transport Corridor (INSTC), as well as its international reputation. How did it come about? In 2012, when the Obama administration wanted to maximize pressure on Iran in order to secure the nuclear deal or the Joint Comprehensive Plan Of Action, it had sent a similar tough message to New Delhi, albeit more discreetly than the Trump administration has. The then Secretary of State, Hillary Clinton, recounts in her book Hard Choices that when she visited New Delhi in May 2012, the “more loudly we urged [India] to change course, the more likely they were to dig in their heels.” India agreed to cut oil imports by 15% subsequently but asserted its autonomy. Three months later, the then Prime Minister, Manmohan Singh, even visited Tehran to attend the Non-Alignment Summit, despite U.S. objections. Eventually, New Delhi operationalized a ‘rupee-rial’ mechanism, under which half of what it owed Tehran for oil imports would be held in a UCO Bank account and made available to Iranian companies to use for any imports from India, an arrangement the Narendra Modi government is seeking to re-energize. Why does it matter? But 2018 is not 2012, and the stakes are higher for the government. Ties with the U.S. are under strain over several issues, including U.S. trade tariffs and India’s defense procurement from Russia, and a major divergence on Iran will exacerbate the problem with India’s biggest trading partner and fastest growing defense partnership. Moreover, in an increasingly globalized world, where Indian companies compete, any U.S. sanctions will make it hard for refiners, insurers and transport companies to facilitate oil trade, even if India wishes to continue it. On the other hand, India’s investment in the Iranian relationship has increased, making a turnaround much more difficult. Just five months ago, New Delhi rolled out the red carpet for Iran’s President Hassan Rouhani and committed itself to increase its oil off-take by 25% this year, as part of easing negotiations for the Farzad-B gas fields India is keen to buy a stake in. India has also committed itself to invest $500 million to build berths at Chabahar’s Shahid Beheshti Port, and $2 billion to build a rail line through the Zahedan province to Afghanistan, in an effort to circumvent trade restrictions by Pakistan. Iran’s other oil importers, China and Turkey, have said they will not accept the U.S.’s diktat. What lies ahead? In the next four months, one can expect complex negotiations between New Delhi and Tehran, and New Delhi and Washington. A U.S. team is expected in Delhi this month, and while a senior State Department official ruled out “waivers or licences” to any country, he did hold out the hope that some flexibility might be negotiable “case-by-case” for countries that agree to reduce oil intake from Iran. Mr. Rouhani, who is on a European tour discussing ways to retain the JCPOA, has warned of dire consequences if the U.S. succeeds in having Iran’s oil exports cut, as this is a “national security” issue. While India’s oil supplies are diversified, its options in this game of diplomatic brinkmanship are narrowing. Art Shell Womens Jersey
Russian Oil Production Soars To 11.193 Million Bpd
In line with its agreement with OPEC to reverse part of the cuts, Russia is boosting its crude oil production, pumping as much as 11.193 million bpd in the first four days of July, up from 11.06 million bpd in June, Reuters reported on Thursday, quoting a source familiar with the data. Last month, Russia and OPEC’s largest producer and de facto leader Saudi Arabia managed to get OPEC and their Moscow-led non-OPEC allies to agree to boost production by unspecified quotas for individual countries part of the pact, to ‘ease market and consumer anxiety’ over the high oil prices. According to Russian Energy Minister Alexander Novak, Russia’s share of the 1-million-bpd total OPEC/non-OPEC increase could be around 200,000 bpd. Before the decision to reverse some of the cuts—or as OPEC and allies put it, to stick to 100-percent compliance rates—Russia’s pledge in the pact was to cut 300,000 bpd of its oil production from the October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd. Even before the OPEC and friends meeting, Russia had already started boosting its oil production, and had pumped as much as 11.09 million bpd in the first week of June—143,000 bpd above the country’s then-quota under the OPEC+ production cut deal. Just before the meeting, all signs were pointing to Russia gearing up for a jump in its oil production, with plans for exports and refinery runs in the coming months indicating that Moscow was preparing to increase its oil production as early as this month. Earlier this week, Russia’s Novak and his Saudi counterpart Khalid al-Falih discussed the latest developments on the oil market and exchanged information about their countries’ plans for production to meet summer demand, Russia’s energy ministry said in a statement. The decision to ease the combined OPEC/non-OPEC compliance rate from 147 percent in May 2018 to 100 percent starting July 1 equates to adding around 1 million bpd on the market, the statement said. Taurean Prince Authentic Jersey
GSPC to commission Mundra LNG terminal in 2-3 months
Gujarat State Petroleum Corp (GSPC) will commission a 5-million-tonne a year liquefied natural gas (LNG) import terminal at Mundra in Gujarat in the next two to three months, its Managing Director, Jagdip Narayan Singh, has said. Mundra will be the third import terminal in Gujarat to import super-cooled natural gas (liquefied natural gas or LNG) in cryogenic ships, re-convert the liquid fuel into its gaseous state before transporting it by pipelines to customers. GSPL LNG Ltd, a GSPC Group firm, which is implementing the project in partnership with Adani Group, will look at inducing a partner like Indian Oil Corp (IOC) once the terminal is fully operational, Singh told PTI. “We will commission Mundra terminal by August-end or mid-September. It will operate at 1.5-mt a year capacity for the first one-and-a-half years before scaling up to full capacity,” Singh, who is also the Chief Secretary of the State, said. Mundra terminal, whose capacity will be expandable to 10 mt per annum in future, is designed to have a berth for receiving LNG tankers of sizes 75,000 cubic meters to 2,60,000 cubic meters, two LNG storage tanks of capacity 1,60,000 cubic meters each, and facilities for regasification and gas evacuation. Gujarat already has a 15 mt a year import facility operated by Petronet LNG Ltd at Dahej and another 5 mt terminal at Hazira that is run by Shell. Besides Dahej and Hazira, India currently has two more LNG terminals – Dabhol in Maharashtra and Kochi in Kerala, both with 5 mt a year capacity. More import terminals are planned on the east coast as well as on the west to meet the fast growing energy needs of the country. Singh said the Gujarat Government-owned company has decided to commission the import terminal first and then look at a strategic partner. “We have been in talks with IOC but as the partnership was delayed, we have now decided to first commission the terminal and then see who can we get as a partner,” he said. GSPL LNG is a joint venture of Gujarat State Petroleum Corp and Adani Enterprises. GSPL LNG will hold the remaining 50 percent stake in the LNG terminal. Adani and GSPC are equal partners in GSPL LNG. Singh said Mundra will be connected to Gujarat State Petronet Ltd’s (GSPL) existing pipelines network at Anjaar, Gujarat. Dennis Kelly Jersey
ONGC pushes back KG gas production target date to end 2019; oil delayed by a year
Oil and Natural Gas Corp has pushed back the start of natural gas production from its biggest project in KG basin to December 2019 as it reworked the $5.07 billion development to accommodate new policies like GST and local purchase preference rules. When ONGC Board had on March 28, 2016, approved investing $5.07 billion in bringing to production a cluster of discoveries in Bay of Bengal block KG-DWN-98/2 or KG-D5, the first gas was targeted for June 2019 and first oil was to flow by March 2020. But now, first gas is expected by December 2019 and oil by March 2021, according to the revised dates presented to the company’s board late last month. “These are not new dates. They were out a couple of months back and we gave an update of the project to the board at its meeting on June 29,” ONGC Director (Offshore) Rajesh Kakkar said. The revised dates were set when ONGC spudded the first of the 34 wells under the project on April 8 this year. While the ONGC Board had in March 2016 approved a field development plan for Cluster-II discoveries in the block that sits next to Reliance Industries’ flagging KG-D6 block in Krishna Godavari basin, new policies like local purchase preference rules, including the one that mandates PSUs to source domestic iron and steel for infrastructure projects were formulated last year. The Goods and Services Tax (GST), which made sweeping changes in indirect taxation regime, was rolled out in July 2017. Also, a policy has been formulated to give public enterprises purchase preference if their bid is within 10 per cent of the lowest price, officials said. ONGC is targeting a peak oil output of 77,305 barrels per day within two years of the start of production. Gas output is slated to peak to 16.56 million standard cubic metres per day by 2022. This the second time that target deadlines for KG-D5 production have been pushed back. ONGC had in 2014 announced plans to start gas production from 2018 and oil by 2019 but a final investment decision was made contingent upon government approving a remunerative price for the deep-sea block as the prevalent rates were uneconomical. But, it was not before March 2016 that the government announced a new pricing formula for difficult areas, giving developers of deepsea fields like KG-D5 more than double the domestic rate. Immediately after that ONGC Board approved the investment plan for Cluster-II group of discoveries in KG-D5. The 7,294.6 sq km deepsea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA – 3,800.6 sq km) and Southern Discovery Area (SDA – 3,494 sq km).The NDA has 11 oil and gas discoveries, while SDA has the nation’s only ultra-deepsea gas find of UD-1. These finds have been clubbed in three groups – Cluster-1, Cluster-II and Cluster-III. Gas discovery in Cluster-I is to be tied up with finds in neighbouring G-4 block for production but this is not being taken up because of a dispute with RIL over the migration of gas from ONGC blocks. For now, Cluster-II is being developed at a cost of USD 5.07 billion, officials said, adding that completion of the entire development plans is expected by August 2021. Cluster-2A mainly comprises oil finds of A2, P1, M3, M1 and G-2-2 in NDA which can produce 77,305 bpd (3.86 million tons per annum) and 3.81 mmscmd of gas. Cluster 2B, which is made up of four gas finds – R1, U3, U1, and A1 in NDA – envisages a peak output of 12.75 mmscmd of gas. Peak output is likely to last 7 years. Cluster-3 is the UD-1 gas discovery in SDA. UD-1 lies in the water depth of 2,400-3,200 metres and its development would be taken up after an appropriate technology is found. Daimion Stafford Authentic Jersey