ONGC Considers Mini-LNG Plants for Gas Evacuation from Isolated Fields.

State-owned Oil and Natural Gas Corporation (ONGC) is exploring the establishment of mini-LNG plants to facilitate the evacuation of natural gas from wells located in areas without pipeline connectivity. The company has identified five potential sites for these mini plants in Andhra Pradesh, Jharkhand, and Gujarat.

These plants will be situated at wellheads, converting natural gas into liquefied natural gas (LNG) by supercooling it to minus 160 degrees Celsius. The LNG produced will be loaded onto cryogenic trucks for transportation to the nearest pipeline, where it will be re-gasified and integrated into the existing network to supply users, including power plants, fertilizer units, and city gas retailers.

To advance this initiative, ONGC has issued a tender inviting bids from manufacturers and service providers to tap into stranded natural gas. The identified locations for the mini-LNG plants include two sites at Rajahmundry in Andhra Pradesh and one each at Ankleshwar in Gujarat, Bokaro in Jharkhand, and Cambay in Gujarat.

According to the tender, despite India's extensive network of pipelines connecting supply and demand centers, a significant volume of stranded gas remains untapped. ONGC estimates that stranded gas volumes can range from 5,000 to 50,000 standard cubic meters per day, potentially producible for up to five years.

The tender outlines plans for establishing small-scale LNG plants on a build, own, and operate (BOO) basis, capable of producing LNG, transporting it via tankers to consumption sites within approximately 250 kilometers, re-gasifying the LNG, and injecting the gas into existing distribution grids or supplying it directly to bulk consumers.

Currently, India produces over 90 million standard cubic meters of natural gas daily, utilized for electricity generation, fertilizer production, CNG for automobiles, and household cooking. However, domestic production meets only about half of the total demand.

ONGC, the largest crude oil and natural gas producer in India, is investing billions to enhance production and reduce reliance on imports. Prior to this tender, ONGC partnered with Indian Oil Corporation (IOC) to set up a small-scale LNG plant near its Hatta gas field in Madhya Pradesh. This plant is expected to have an initial capacity of 32 to 35 tonnes, processing 45,000 standard cubic meters of gas per day from the Hatta field.

IOC will oversee the feasibility study and costs of the project, while ONGC will supply gas to IOC, which will manage the plant and sell the gas to consumers.

Earlier this year, state-owned GAIL (India) Ltd also announced plans for a small-scale LNG plant at its Vijaipur LPG unit in Madhya Pradesh. ONGC officials indicated that the company has over 100 wells across the country with insufficient volumes to justify pipeline installation, leaving much gas stranded or flared. The introduction of small LNG plants could help unlock this vital resource and enhance domestic production.

HBL