The Hindu : Business : Natural gas find larger than stated, says Modi

Online edition of India's National Newspaper
Wednesday, Jun 29, 2005

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Business

Natural gas find larger than stated, says Modi

Special Correspondent

Gas production expected to commence by December 2007

NATURE'S BOUNTY: The Gujarat Chief Minister, Narendra Modi, with the Energy Minister, Suresh Patel, appraising the media in New Delhi on Tuesday about new gas finds. — Photo: Anu Pushkarna

NEW DELHI: Gujarat Chief Minister Narendra Modi has declared that the offshore natural gas reserves found by the Gujarat State Petroleum Corporation (GSPC) in the Krishna-Godavari basin are even larger than the formal announcement of 20 trillion cubic feet (tcf). Hinting at the presence of crude oil at the same site, he said these were "business secrets'' meant to be unveiled at a later date.

He denied that the assessment of 20 trillion cubic feet of in-place gas reserves was an over-estimate. In fact, he said experts, who had made the evaluation, pegged the quantity much higher but he had been "very conservative.'' Regarding the quantity of gas that would be commercially viable, he said as much as 85 per cent of the 20 tcf estimate was expected to be recoverable with the latest technology.

Addressing a press conference here on Tuesday, Mr. Modi said natural gas production was expected to commence by December 2007 with an initial output of ten million standard cubic metres a day.

The production is expected to rise to 80 million standard cubic metres a day, after ten years, according to GSPC officials. They said development of the field would require Rs. 1,500 crore, which the GSPC planned to raise through a mix of internal accruals, debt and an initial public offer (IPO).

The initial estimates of the find were more than that of Reliance Industries Limited of 14 tcf in deep sea waters in the Krishna-Godavari basin and the Oil and Natural Gas Corporation's Bassein field, off the Mumbai coast, which had 10 tcf of proven reserves, they said.

Mr. Modi said the production timeframe would be shorter than the six years set by RIL for its gas find in the K-G basin. The officials said this was because the GSPC gas discovery was in shallow waters and is thus nearer the coastline.

Asked about the Directorate-General of Hydrocarbons (DGH) having objected to the announcement before official clearance, Mr. Modi said such clearance had not been taken by other companies in the past.

He pointed out that Cairn Energy had made the announcement after making its oil find in Rajasthan while RIL had made the announcement after the natural gas discovery in the K-G basin.

On resources needed for transport of natural gas within the country, he said over Rs. 5,000 crore would be required to set up pipeline facilities for bringing the gas to Gujarat. He felt there would be no problem on raising these funds as both the corporate sector and the State Government were likely to be involved in the venture.

In fact, he said there could be a barter agreement by which Gujarat could take gas supplies from a nearer point and the K-G basin gas could be diverted to States in that region.

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