DGH Explores Solutions for Stranded Natural Gas in Small Fields

DGH -Explores- Solutions- for- Stranded -Natural- Gas- in -Small -Fields
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The Directorate General of Hydrocarbons (DGH) is actively working on a solution to address the issue of stranded natural gas in small fields across India.

These fields remain disconnected from the gas grid due to the absence of tie-in pipelines required for last-mile connectivity.

Significant Stranded Gas Reserves

An estimated 13.9 million standard cubic meters per day (mmscmd) of gas, which accounts for 14% of India’s current annual domestic production, could remain untapped.

Regions affected include the North East, Rajasthan, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, West Bengal, Jharkhand, and Kutch offshore.

Connecting these reserves to existing and upcoming gas grids is critical to utilizing this proven resource.

Economic Viability Under Review

According to Pallavi Jain Govil, Director General of DGH, estimates are needed to determine the investment required to evacuate the stranded gas. Provisions like tolling are being explored to ensure economic feasibility.

Govil said, “We are currently evaluating the economics and assessing whether additional government support, such as capital subsidies or viability gap funding, is necessary to make this project viable for operators”.

Offshore Pipeline Connectivity in Focus

The DGH is also considering the development of common carrier pipelines in offshore regions such as Mahanadi, the Gulf of Kutch, and Kaveri.

Several blocks are expected to start gas production in the coming years, but they lack existing gas transportation infrastructure.

Recent Policy Measures to Boost E&P Activities

To accelerate exploration and production (E&P) activities, the government has implemented several policy initiatives.

Notably, around one billion square kilometers of offshore areas were previously designated as ‘No-Go’ zones. These zones were under the control of defense agencies. However, they are now available for E&P operations.

With only 10% of the country’s basin area explored, significant opportunities await E&P companies.

Progress Under DSF and OALP Rounds

The government has conducted three bidding rounds under the Discovered Small Fields (DSF) scheme. It has awarded 85 contracts to small, medium, and large E&P companies.

Govil noted significant investor interest in future opportunities under this initiative.

The Open Acreage Licensing Policy (OALP) has seen eight successful bidding rounds. These rounds resulted in the allocation of 144 exploration blocks, covering 242,000 square kilometers.

The ninth round, recently concluded, will award 28 blocks. Govil also revealed that the DGH is ready to launch the tenth OALP round, pending government approval.

As reported by energy.economictimes.indiatimes.com, the DGH aims to unlock the full potential of India’s natural gas reserves. We will achieve this by addressing key challenges and creating an investor-friendly environment.