Financial Daily from THE HINDU group of publications
Wednesday, Jul 07, 2004
Industry & Economy
ONGC to spend Rs 30,000 cr on LNG, petrochem, power
Mr Subir Raha
Mumbai , July 6
OIL and Natural Gas Corporation Ltd plans to invest close to Rs 30,000 crore on LNG, power and petrochemical projects in the three to four years.
This will be in addition to ONGC's annual investment target of Rs 10,000 crore on projects in India and Rs 5,000 crore abroad, said Mr Subir Raha, Chairman and Managing Director, ONGC Ltd.
ONGC plans to exploit power-trading opportunities arising from the Electricity Act 2003 by setting up three new gas-fired power projects totalling a capacity of 3,546 MW, Mr Raha told analysts and newspersons last night.
The company also plans to sell around 1,000 MW surplus power produced at its Mumbai High offshore platforms, Uran and Hazira assets apart from the Tripura and Assam installations. It plans to set up a 1,000-MW plant at the Dahej special economic zone, a 1,446-MW plant at Mangalore and a 1,100-MW power station at Ennore in Tamil Nadu.
Total investments in power would be close to Rs 10,000 crore, Mr Raha said.
The company will need five to six million cubic metres of gas per day to fire these power projects. Most of this would be gas saved after the company achieves zero flaring at its installations by 2005-06, he said.
ONGC plans to set up a 10-million-tonne LNG terminal at Mangalore, scheduled for completion within 36 months after work begins at a cost of Rs 9,000 crore. It also plans to set up petrochemical projects at Mangalore and expand capacity at Dahej.
Mr Raha said ONGC hoped to set up a shipping division for crude and LNG transport but there are no firm plans at the moment.
"We plan to double the capacity of our Tatipaka refinery and will set up another mini-refinery at Ankleshwar. We also plan to produce petrol, diesel and aviation turbine fuel at Uran," Mr Raha said.
ONGC is looking at enhanced oil and gas recovery from 15 onshore fields and will develop three new fields G1-GS15 in the coming year he said. ONGC will outsource service contracts for 93 marginal fields during this year, he said.
The company will set up only three to five new retail outlets under its brand name in this financial year, Mr Raha said.
"We will build the new brand before investing in a large number of outlets," he said.
OVL to focus on West Africa
ONGC Videsh Ltd (OVL) will increase its focus on properties in West African countries, such as Angola, Ivory Coast and Cameroon, according to Mr R.S Butola, Managing Director, ONGC Videsh.
Mr Butola said that although rising international crude prices would mean that acquisition of even marginal fields will become costlier, ONGC Videsh plans to focus on properties that either do not interest global oil giants or are located in politically sensitive areas.
He said the company had nearly completed negotiations for acquiring a major property in Angola, which is expected to bring in five million tonnes of LNG by mid-2007. Also, oil and gas production will increase in 2006-07 when oil and gas from its Sakhalin field starts flowing in, Mr Butola said.
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