ONGC may save up to $800 mn if it uses RIL's KG set-up: Report
Hyderabad: State-owned ONGC could save up to USD 800 million on capital cost if it decides to use infrastructure facilities owned by Reliance Industries at KG-Basin for processing gas, according to a draft report submitted by Aker Solutions.
Norway-based Aker Solutions, appointed by ONGC to explore the possibility of sharing RIL's infrastructural facilities on the East Coast, is expected to submit its final report next month, sources close to the development said.
"The capital cost savings of ONGC will be in the range of USD 700 to 800 million. ONGC will process its gas output from some of the fields in KG-Basin in RIL facility and in return RIL will get processing charge.
"That way, sharing of infrastructure will be beneficial for both the companies if they decide to go ahead with Aeker's report," a source privy to the draft report submitted by Aker said.
In July last year, ONGC had inked a Memorandum of Understanding with RIL to explore the possibility of sharing the latter's infrastructural facility in the East Coast.
This is expected to expedite ONGC's field development, resulting in early monetisation of its deep water fields adjacent to the fields of RIL, ONGC had said earlier.
"There are two issues that Aker has looked into. One is technical feasibility and the second is financial feasibility. From the draft report it appears that both the aspects are satisfactory," the source further said.
When contacted, Ashok Varma, Executive Director (Asset Manager) Eastern Offshore Asset at ONGC, confirmed that the Norwegian company has submitted the draft report.
"They have submitted the draft report and we wanted certain clarifications. They will incorporate them and submit the final report," Varma said, without revealing the details.
A senior official of ONGC had earlier said if everything goes well then ONGC and RIL will start working from 2017.
ONGC has made nine gas discoveries in KG block KG-DWN-98/2, which is next to RIL's KG-DWN-98/3 or KG-D6 block.
The state-owned firm plans to club these finds with discoveries in another neighbouring block to begin gas production from 2016-17.