ONGC seeks to share RIL KG-D6 infra to save $4 bn - Financial Express

Oil and Natural Gas Corporation (ONGC) has initiated talks with Reliance Industries seeking a deal to share infrastructure at the Krishna-Godavari (KG) basin. The state-run explorer's move follows an internal study that said it could save $4-5 billion in capital expenditure if the deal materialises. ONGC has made nine gas discoveries in its KG block called KG-DWN-98/2, which sits next to RIL's KG-D6 block. For ONGC, which has lined up a capital expenditure of around R51,500 crore or close to $9 billion for the block by 2030, the estimated savings from sharing of infrastructure could be a windfall. ONGC is now planning to appoint a consultant to work out the modalities of how the resources can be shared. Some of the international consultants the company could consider include Aker, Technip and GE. ONGC wants to share RIL's gas processing and transportation facilities for the KG basin. This includes RIL's underutilised gas gathering station at KG-D6 along with pipelines that take the fuel on to the land as also its processing plant at Kakinada in Andhra Pradesh. "We might have to pay only for the tolling charges of transporting gas through RIL's pipelines. As RIL has recovered the rest of the investments like pipelines, transmission systems, controls, etc, these assets are as good as owned by the government," an ONGC official said. Currently, oil companies are allowed to first recover the entire cost of exploration and production and only then share the profit with the government. This policy could change if the government implements ... contd. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFwDHRjx1hl84P1DnWewoOSfvGRJw&url=http://www.financialexpress.com/news/ongc-seeks-to-share-ril-kgd6-infra-to-save-4-bn/1135876

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