India’s Oil & Natural Gas Corporation (ONGC) has fired the starting pistol on an integrated deep-water development project in the prolific Krishna Godavari basin off the country’s east coast.

Multiple people familiar with the development told Upstream that the state-owned company recently initiated a pre-qualification process, aimed at shortlisting leading international engineering houses and consultancies to carry out pre-front end engineering and design and FEED studies on the Cluster 1 project in Block KG-DWN-98/2.

ONGC is spending billions of dollars to ramp up oil and gas production from its east coast deep-water assets, which are expected to contribute more than 35 million cubic metres per day of gas and up to 77,000 barrels per day of crude at peak.

Many of ONGC’s deep-water projects centred on KG-DWN-98/2 have been in the works for several years but have recently moved into the execution stage as the company chalked out firm development plans.

Integrated development

The most recent project on offer envisages the integrated development of the Cluster 1 region on the KG-DWN-98/2 asset — involving the DWN- E1 and F1 fields — and the nearby GS-29 block, one person noted.

ONGC had earlier prepared a field development plan for the integrated development of the DWN-F1 and GS-29 assets and the standalone development of DWN-E1.

However, the company subsequently decided to integrate the deep-water developments, aimed at optimising costs and fast-tracking oil and gas projects within the block, which have been undeveloped for years, another source stated.

Production targets

Cumulative gas production from GS-29 and the DWN-F1 field is expected to be 1.06 billion cubic metres at a peak rate of 710,000 cubic metres per day, over a period of four to seven years, sources said.

Total gas production from the DWN-E1 field is expected to be about 2.39 Bcm, with peak production of 700,000 cubic metres per day over a period of 13 years.

In addition, sizeable oil production is also being targeted by ONGC from Cluster 1, but the precise volumes could not be confirmed by Upstream.

The key facilities being targeted for the integrated development include the re-entry and completion of six subsea wells, several kilometres of well fluid lines, infield control umbilicals, a floating storage and offloading vessel, installation of a single buoy mooring (SBM) and multiple facilities at the upcoming central processing platform for the Cluster 2 asset in the same block, Upstream understands.

The workscope will be divided into multiple packages — subsea umbilicals, risers and flowlines (SURF), SBM, subsea production systems, the leased FSO and other related packages.

ONGC — headed by managing director Arun Kumar Singh — aims to select a key engineering consultant following the pre-qualification process to work on the integrated development project through different stages.

The first phase envisages concept selection and pre-FEED; the second one involves preparation of FEED, technical bid package and assistance in evaluation and award; while the third phase includes project management consultancy services.

Some of the engineering contractors which have previously shown interest in similar ONGC tenders include Norway’s Aker Solutions; KRB of the US; WorleyParsons subsidiary IntecSea; UK companies PDI, Genesis, Wood, Bayphase and Z -Subsea; and domestic players Kavin Engineering and RINA, sources said.

Cluster 2 development

ONGC’s ongoing $5 billion-plus development of the Cluster 2 region is at the heart of its east coast deep-water plans.

Cluster 2, one of the most promising areas, involves multiple oil and gas discoveries in the northern part of the offshore block.

The company has awarded multiple engineering, procurement, construction and installation (EPCI) contracts for the Cluster 2 development.

In October 2018, McDermott, along with Baker Hughes and local player Larsen & Toubro, was awarded a $1.69 billion subsea EPCI contract for work on the KG-DWN-98/2 asset.

ONGC recently said that is aiming to begin oil production in May from its much-delayed Cluster 2 development.

Cluster 2’s floating production, storage and offloading vessel contractor, Shapoorji Pallonji Energy, confirmed that it “has achieved a significant milestone of hook-up” for the Armada Sterling V FPSO offshore Kakinada.

The Cluster 2 region is expected to produce up to 16.6 MMcmd of gas and 78,000 bpd of oil at its peak.

A grouping of India’s Afcons and Malaysia’s Sapura Energy is involved in the EPCI for the project’s offshore central processing facility, but the project has hit a rough patch owing to Sapura’s financial woes.

Block KG-DWN 98/2 lies offshore the Godavari River delta in the Bay of Bengal. It is located 35 kilometres off the Andhra Pradesh coast in water depths ranging from 300 to 3200 metres.