ONGC Awards Its 'Largest Subsea Contract'
Three contractors have been awarded the subsea contract for India's state-owned Oil & Natural Gas Corporation's largest deepwater project, block 98/2 in the Krishna Godavari basin.
Baker Hughes (BHGE) and McDermott of the US along with Indian Larsen & Toubro's subsidiary L&T Hydrocarbon Engineering (LTHE) have been jointly awarded the engineering, procurement, construction, installation and commissioning (EPCIC) contract, they said on October 3. ONGC said the contract is worth $1.7bn.
McDermott said the award represents "the largest single subsea contract awarded by ONGC" and that delivery is scheduled for 2020 for the gas system and 2021 for the oil system.
In May 2018, ONGC chairman Shashi Shanker said that gas production from NELP block KG-DWN-98/2 offshore the city of Kakinada in the east Indian state of Andhra Pradesh was expected to start from 2019 and that ONGC would produce 25.87mn metric tons of oil and 45.28bn m3 of gas from the field by 2034-35.
ONGC's October 3 statement said it envisages first gas production by December 2019, first oil by March 2021 and overall project completion by August 2021, adding that the project will have a "key contribution" in fulfilling Prime Minister Narendra Modi's call on energy companies to achieve a 10% reduction in import dependency by 2022.
BHGE will now provide all of the subsea hardware as well as pre-commissioning services, while McDermott will bring its specialised fleet of pipelay and construction vessels and its EPCI capabilities.
"Built on a unique successful partnership model with McDermott and LTHE, the project will deliver leading technologies to ONGC across a full subsea scope," said BHGE's oilfield equipment CEO Neil Saunders, while McDermott senior vice president for Asia Pacific Ian Prescott said that the consortium "provides a key made-in-India element by LTHE that represents local capabilities as well."
It was a particularly good day for LTHE owner Larsen & Toubro: it also won a US$415mn contract to construct the new Terminal-2 building of Bengaluru (formerly Bangalore) international airport.