Live Mint India’s gas output to fall as ONGC plans pipeline repair

Live Mint India’s gas output to fall as ONGC plans pipeline repair

‘We’ll shut the bigger of the two pipelines for about 15 days. We’ll have to reduce output at some of the wells,’ said chairman

New Delhi:

 Oil and Natural Gas Corp. (ONGC), India’s biggest energy explorer, will cut natural gas output from its biggest fields in the Arabian Sea this month to repair a pipeline.

“This is a planned shutdown for some very important repair work,” chairman Dinesh Kumar Sarraf said in a telephone interview from Mumbai. “We’ll shut the bigger of the two pipelines for about 15 days. We’ll have to reduce output at some of the wells.”

Shares of ONGC reversed gains after the report and fell as much as 0.2% to Rs.309.50 in Mumbai. They traded at Rs.309.90 as of 12:29 pm.

Lower gas production by ONGC, which contributes about two- thirds of India’s total output, will squeeze supplies to industries such as power plants that are struggling to generate electricity due to a shortage of the fuel. India has about 14.3 gigawatts of gas-based power capacity stranded due to lack of fuel, Crisil Ratings, the local unit of Standard and Poor’s, said in a 11 May report.

The pipeline to be repaired starting next week transports natural gas from the various fields in the Arabian Sea to a processing plant in Hazira in Gujarat state through two sub-sea pipelines. The company will operate the smaller pipeline at Hazira and will divert some gas to its plant at Uran in Maharashtra state to reduce the impact of the shortfall, Sarraf said.

ONGC produced 22 billion cubic meters of natural gas in the financial year ended 31 March. Three-quarters of that output came from the fields in the Arabian Sea, including Mumbai High, the New Delhi-based company’s most productive asset.

ONGC has already informed GAIL India Ltd, the state-run gas distributor, and the oil ministry about the shutdown plan, Sarraf said. Bloomberg

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