Gujarat Gas to buy Lakshmi field gas

Gujarat Gas Co. Ltd. agreed to buy 1.27 million cu m/day of gas for 5 years from Lakshmi field in the Gulf of Cambay off west India. Cairn Energy PLC and partners own that field, in Block CB-OS/2.

Sept. 21, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Sept. 21 -- Gujarat Gas Co. Ltd. agreed to buy 1.27 million cu m/day of gas for 5 years from Lakshmi field in the Gulf of Cambay off west India.

Cairn Energy PLC and partners own that field, in Block CB-OS/2.

The Lakshmi field was discovered in May 2000 and production is scheduled to begin by July 2002. The contract should begin July 1, 2002 (OGJ Online, Jan. 8, 2001).

Gas will be delivered to a new terminal being built by Cairn Energy and its partners at Suvali, then enter Gujarat Gas's transmission system.

BG Group PLC, which owns 65.13% of Gujarat, said the field is ideally placed to provide gas to feed Gujarat Gas's 130,000-customer base. The supply will enable the company to extend its 1,500-km pipeline system into the industrial cities of Ahmedabad and Vadodara in central Gujarat. That proposal is subject to government approval.

Frank Chapman, CEO of BG, said: "This agreement confirms BG's strong commitment to India and underpins Gujarat Gas's strategy for extending its network and for supplying growing markets in the region."

Gujarat Gas, India's largest privately owned gas distribution company, will also benefit financially from third party access in its 73-km Hazira-Ankleshwar transmission pipeline, following a gas sales agreement signed between the Lakshmi field coventurers and Gujarat Powergen Energy Corporation.

The remaining 34.87% stake in Gujarat is held by the Gujarat state government, financial organizations, and the public.

Cairn holds 75% of block CB-OS/2. Partners are TATA Petrodyne Ltd., with 15%, and government-owned Oil & Natural Gas Corp. with 10%. ONGC can increase its interest 30%, cutting Cairn's to 50%.