Upstream | Downstream | Operations Map

Next phase of development of the mid-Tapti gas field completed and first gas produced New agreements signed with GAIL to take Panna/Mukta and Tapti (PMT) gas production Part of the PMT gas production allocated to Gujarat Gas Company Limited (GGCL) Signed farm-ins to two deep water blocks off the Indian east coast (one still subject to approval)

BG Group is a key player within the gas industry in India, with a significant presence in both the E&P and T&D segments. BG Group has increased its exposure in India’s growing natural gas sector by developing its upstream position through licensing rounds and acquisitions. BG Group is also actively contributing to the developing regulatory debate on the further expansion of downstream markets and is interested in exploring further opportunities in each element of the gas chain.

Key dates

1995
Mahanagar Gas Ltd (MGL) formed

1997
Acquired majority stake in GGCL

2002
Acquired Enron Oil and Gas India Limited and thereby a 30% participating interest in PMT fields

2007
Signed PSC for Block KG-OSN-2004/1

In February 2002, BG Group completed the acquisition of Enron Oil and Gas India Limited, gaining a 30% participating interest in the Tapti gas field and the Panna/Mukta oil and gas fields. In 2007, the combined fields produced around 45.6 mmboe (gross) – representing approximately 10% of India’s total oil and gas production. Gross production from PMT has doubled in the past five years, since BG Group took over the management of technical operations. BG Group’s aim is to maximise recovery from PMT through ongoing field development.

The Panna infill programme, which involved drilling 26 wells, was successfully completed in early 2006 and is expected to increase recovery by around 50 mmbbl and 200 bcf gas. As a part of the first phase of the approved Expanded Plan of Development (EPOD) for Panna, two wellhead platforms have been installed and development wells are being drilled. First production from EPOD was achieved in February 2007. The EPOD for Panna also involves the drilling of 20 wells, of which 17 had been drilled by second quarter 2008, at a cost of more than US$280 million.

The fourth wellhead platform on the south Tapti field came onstream in 2006 to help maintain a 250 mmscfd production rate. In August 2007, the next phase of development of the mid-Tapti gas field was completed and first gas produced. The new facilities enable the supply of an additional
200 mmscfd of gas to markets in the western region raising gas production to 450 mmscfd.

From April 2005, for a period of three years, the PMT co-venturers sold the gas produced from the PMT fields directly into the domestic market. In April 2008, following the re-nomination of GAIL (India) Limited as the Government of India nominee to take the entire gas production from the PMT fields, BG Group and
co-venturers entered into an agreement with GAIL to supply 17.3 mmscmd of gas from these fields as per the terms of the PSC.

BG Group has been expanding its position in the Indian market via licence rounds and farm-ins. In the 2006 NELP VI licensing round,
BG Group acquired a 45% interest in exploration block KG-OSN-2004/1 in the Krishna Godavari Basin. The shallow water block, which covers an area of approximately
1 131 square kilometres, is located off the east coast of India. Oil and Natural Gas Corporation Limited (ONGC) holds the remaining 55% interest and operatorship of the block. The PSC was signed with the Government of India in March 2007.

In February 2008, BG India signed two farm-in agreements with ONGC to acquire a participating interest in two deep water blocks off the Indian east coast, subject to Government approval. Under the terms of the agreements, BG Group will acquire a 30% interest in KG-DWN-98/4 block and a 25% interest in MN-DWN-2002/02 block. The Ministry of Petroleum has recently approved BG Group’s 30% interest in the KG-DWN-98/4 block.

Gujarat Gas Company Limited

BG Group has a 65.12% controlling stake in GGCL, India’s largest private sector natural gas distribution company in terms of sales volume. GGCL currently has more than 230 000 residential, commercial and industrial customers, and serves more than 73 000 CNG users. GGCL has been part of the BG Group portfolio since 1997. The remaining 34.88% is publicly owned.

In 2007, GGCL recorded a growth of 10% in gas sales volumes. Volumes increased in all segments, notably in the industrial retail segment by 20%, and the vehicle segment by 49% due to higher conversions to CNG. More than
18 000 vehicles were converted to run on this cleaner fuel and GGCL added five CNG stations to its network in Surat. Since the start of 2008, another one has been upgraded taking the total to 26. Investment to enlarge and upgrade GGCL’s pipeline network and associated infrastructure continued throughout 2007 and 2008.

In April 2008, following the re-nomination of GAIL as the Government of India nominee to purchase PMT gas production, an agreement was also entered into with GAIL for it to supply 2.13 mmscmd of gas to GGCL. GGCL meets the rest of its gas requirements from other sources.

Mahanagar Gas Ltd

MGL is based in India’s commercial capital, Mumbai. It is India’s largest city gas distribution company in terms of size of customer base. At present, there are 130 CNG outlets, with 637 dispensing points in Mumbai, Thane and
Mira-Bhayander which serve 186 574 vehicles (as at 30 June 2008). MGL owns and controls almost 2 543 kilometres of pipeline and is extending its network beyond Mumbai into the neighbouring cities of Thane, Mira-Bhayander and
Navi-Mumbai. BG Group and GAIL (India) each have a 49.75% stake in MGL, with the balance held by the Government of Maharashtra.

The number of connected domestic customers has risen to 331 203 as at 30 June 2008. MGL also supplies natural gas to 982 small commercial and industrial establishments in Mumbai. In 2007, MGL increased gas sold to 511 mmcm. Further expansion of the pipeline network to neighbouring towns has continued in 2008.

The Government of India has set up a Petroleum and Natural Gas Regulatory Board (PNGRB), which started functioning in October 2007. BG India, GGCL and MGL have been actively involved with PNGRB in advocacy and formulation of regulations for the midstream and downstream gas sectors.