ONGC Board Okays Mumbai, Dahej Developments

The board of Oil and Natural Gas Corporation Ltd. (ONGC), in its 158th meeting on August 8, 2006 has approved investment proposals for (i) Development of C-series in Mumbai offshore and (ii) Dahej Petrochemicals Complex.

(i) Development of C-series in Mumbai offshore

The C-series marginal field--located 60 kilometers west of Daman in the Tapti Daman block of Mumbai offshore--will be developed by ONGC at an investment of Rs. 3195 Crore.

The field, situated at water depths ranging from 19 to 35 meters, is believed to hold in-place reserves of 15.54 billion cubic meters of gas and 4.46 million cubic meters of condensate.

The development of the first phase will be completed by December 2008. Eight platforms will be installed and 17 wells will be drilled to develop the marginal field. The estimated gas production would be more than 3 million standard cubic meters per day.

Though the field was discovered in the 1990s, it has become viable only recently due to market-determined prices for natural gas.

(ii) Dahej Petrochemicals Complex

Pursuing an ongoing business goal of enhancing value chain integration, ONGC will implement a global-scale petrochemicals complex comprising 1.1 million tonnes per annum of ethylene capacity dual-feed cracker, along with associated units and polymer plants, to manufacture HDPE, LLDPE, PP, and styrene butadiene rubber (SBR) at Dahej in Gujarat state.

The complex will be integrated with ONGC's own C2-C3 plant, which is currently under execution (at Dahej) and naphtha as feedstock from ONGC's own operational units at Hazira and Uran. The project is proposed to be implemented through an SPV route, with ONGC having management control, holding 26% equity. GSPC has evinced interest to participate in the project as a joint venture partner. With a projected debt-equity ratio of 2.55:1, ONGC's anticipated equity investment (26%) would be around Rs. 992 Crore.

With assistance from the Gujarat Government through participation of its nominee GIDC as a co-promoter, ONGC's Petrochemicals Complex--as the anchor industry--will be built in the Dahej Special Economic Zone (D-SEZ). This would help to optimize the project cost and help to develop various plastic processing industries within the SEZ to seize significant export market potential.

The petrochemicals complex, with a global-capacity cracker that will be India's largest, will involve investment of around Rs. 13,600 Crore for its implementation, along with downstream polymer plants. With its commissioning around mid-2010, it will catalyze significant economic development in western India and the country as well.

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