ONGC, OIL and BPCL to develop giant gas field in Mozambique

Public sector oil companies Oil and Natural Gas Corporation (ONGC), Oil India Limited (Oil) and Bharat Petroleum Corporation Limited (BPCL) are ready with a $6-billion war chest to develop a gigantic gas field off the Mozambique coast and converting the fuel into liquefied natural gas (LNG) for export over the next four years, minister for petroleum and natural gas Dharmendra Pradhan said here on Monday.

ONGC Videsh Limited, the overseas arm of ONGC, Oil and a unit of BPCL together hold 30-per cent interest in Rovuma Area-1, which is estimated to hold recoverable gas reserves of 75 trillion cubic feet. The project, with capacity to produce 20 million tonnes of LNG annually, would be the world's largest LNG export site after Exxon-Mobil-run Ras Laffan in Qatar.

Pradhan, who returned from a two-day trip to Mozambique on Sunday night, said, "The first LNG from the block is targeted for 2018-end or early 2019." Rovuma Area-1 is the largest investment of India in any single hydrocarbon asset abroad, Pradhan added. "I had a very successful tour to Mozambique ... we are getting full cooperation from the Mozambique government for early development and monetisation of Rovuma Area-1."

Pradhan said that the consortium is talking to Indian buyers like Gas Authority of India Limited for selling LNG. "If it fetches more money (to us) by selling the LNG then and there itself, we will opt for that. But if it is beneficial to bring the gas to India, we will certainly look at that option."

An estimated $18.4 billion will be required to bring the first set of discoveries in Rovuma Area-1 on to production and convert that gas into LNG so that it can be shipped out to consuming nations like India. OVL's share would be $2.944 billion. OVL had in 2013 bought Videocon's 10-per cent stake in the Rovuma Area-1 for $2.475 billion. It followed this up by acquiring another 10-per cent stake in the same field from Anadarko Petroleum Corp of the US for $2.64 billion. The 10-per cent stake of Videocon was split in 60:40 ratio with Oil.