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BG India along with consortium partners Oil and Natural Gas Corporation and Reliance Industries Limited has decided to invest approximately $500 million for development and expansion of the Tapti gas field, offshore Mumbai. Consequently, the committed investment by the joint venture amounts to over $900 million.
ONGC has 40 per cent interest in the Tapti gas field, while BG and Reliance Industries each have 30 per cent stake.
Nigel Shaw, CEO, BG India said: "Embarking on this project will significantly increase production from the Tapti Field and bring to market much needed gas supplies. The field has been performing robustly since we increased production in November last year with new compression facilities."
The consortium partner from April 1, 2005 have also been selling gas directly to customers at market-driven prices. While the consortium has priced its gas at $ 3.86 per mbtu to the state-owned GAIL (India) ltd for a period of one year, it has price the gas at $ 4.08 per mbtu for other customers including Gujarat Gas Company Ltd, Reliance Industries and Indian Petrochemicals Corporation Ltd.
Shaw in a press release further pointed out that, "from April 1, 2005, the partners were given the right to directly sell gas from the Tapti and the associated Panna/Mukta Contract Areas into the marketplace. This progressive move strengthens India's gas industry to move to a more liberalised regime where market-driven prices are derived."
The government has approved the investment plan for the development of the mid-Tapti field with installation of a processing platform and new compression facilities to increase production in 2007.
The mid and south Tapti contract area is located 160 kilometres north- west of Mumbai and amounts to 363,500 acres. Tapti has estimated gas in place of 3.75 trillion cubic feet.
A single wellhead platform will be installed to drill up to eight new wells in order to raise gas production from the current rate of 250 million standard cubic feet per day (mmscfd) to 450 mmscfd. A new 20-inch export pipeline will be laid and in the initial stage four wells will be drilled.
In November 2004, the partners installed compression facilities on the south Tapti field, at a cost of $ 16 million, increasing gas production from 180 mmscfd to 250 mmscfd.