Businessline: Cairn may be sitting on a big gas find in Rajasthan

Rajasthan may come to the rescue of gas-based industries, with Cairn India’s Barmer fields showing significant blue fuel prospects. Though the company has not disclosed the potential, it is working on a new plant at the Raageshwari Gas Terminal to process up to 8.5 mmscmd (million standard cubic metres a day) of the fuel. This, according to industry trackers, points to significant gas resources in the block, south of the Barmer acreage.

Extension of contract

If Cairn and its block partner, ONGC, prove high gas prospects, they can get a 10-year extension for the asset. Although the production-sharing contract is valid till May 14, 2020, the joint venture has approached the Ministry seeking an extension with an eye on making future investments; it is yet to hear from the Ministry.

The contractor may not have a problem getting a five-year extension as the production-sharing contract for the block allows initial extension of five years.

However, a 10-year extension is allowed if the block’s gas sales profile extends beyond 2020. The contractor is also eligible for an indefinite extension subsequently.

Cairn-ONGC has drilled two high-impact prospects to test potential gas accumulation in the area. The results are encouraging and testing is underway, a source said. At present, the block produces only a small quantity of gas. MORE