NEW DELHI: Oil & Natural Gas Corporation (ONGC) has awarded a multimillion-dollar deal to a leading contracting player for work on a key package, for the eighth development phase of its pipeline replacement project (PRP-8) offshore western India.
PRP is ONGC’s flagship offshore job, with work usually performed every two years to boost the pipeline infrastructure at some of the company’s largest fields.
The PRP-8 project is crucial to ONGC’s ambition to boost output from its maturing oil and gas fields off India’s west coast.
The Indian state-owned operator recently awarded a $283 million engineering, procurement, construction and installation (EPCI) deal to compatriot Larsen & Toubro (L&T) for work on Package-B of the PRP-8 project, three people familiar with the development told Upstream.
“A Notification of Award for the PRP-8 contract has been recently placed by ONGC, with work likely to commence within weeks,” one person noted.
Package B (also referred to as Group B) envisages the EPCI of almost 140 kilometres of pipelines to be laid across multiple offshore west coast assets, another person noted.
The other key PRP-8 project — dubbed Package A — involving the EPCI of more than 90 kilometres of pipeline is yet to be awarded by ONGC, the source added.
A third person noted that the operator has awarded the Package B first, as the EPCI project is within the permissible limit of ONGC’s budget, while a significant budgetary price difference still remains for Package A.
L&T was the only commercially qualified bidder for the coveted PRP-8 project, after ONGC earlier disqualified the only other contender, Nigeria’s Westfield Energy.
ONGC and L&T have yet to respond to Upstream’s questions on the PRP-8 award.
Three key west coast offshore assets — Mumbai High, Bassein & Satellite and Neelam Heera — are being targeted by ONGC in PRP-8, sources said.
Its west coast fields are well developed, with an extensive infrastructure of wellhead platforms, process platforms and pipelines.
“With the ageing of the field, the condition of some of its existing pipelines has deteriorated. The company is planning for replacement of these pipelines in a phased manner,” according to an ONGC document earlier seen by Upstream.
In addition, it plans to lay new pipelines for better management of the field.
ONGC’s west coast offshore fields are maturing and require several phases of redevelopment to maintain their production profiles.
The company has carried out seven expansion phases of the PRP over the past decade.
In 2022, L&T won a “large” contract for the seventh phase. The PRP-7 workscope involves the EPCI of 350 kilometres of subsea pipelines and related offshore works.
Although L&T did not disclose the exact value of this contract, Upstream understands it could have been worth close to $500 million.
In 2019, Valentine Maritime won a contract for work on PRP’s sixth expansion phase, which was believed to be worth between $150 million and $170 million.
Malaysia’s Sapura Energy won a subsea pipeline contract in 2018, comprising work on the fifth phase, also known as the subsea wells and pipeline replacement project (SSPRP-5).
In 2017, ONGC awarded L&T a $200 million contract for work on PRP-4, which had been left unfinished by Singaporean contractor Swiber Offshore.
ONGC has stated ambitious plans to set up multiple offshore facilities in India, with combined investments likely to be about $11 billion.
The company is also advancing a key project to replace more than 130 ageing platforms, off the country’s west coast, Upstream reported.
The Indian state-owned heavyweight within weeks is expected to launch the tender to select a design engineering consultant, which would perform work on the replacement of 35 to 40 platforms, two people familiar with the development told Upstream.
Domestic crude production has been dwindling in recent years and ONGC is under increasing pressure from the government to boost its oil output to reverse the decline.
Some of the other main projects being targeted by ONGC in the west coast region in the coming years are developments of the Ratna and R-Series and North Tapti fields, the Cluster 9 development, the B-193 phase two project, platform makeover projects and the MB0SN-2005/1 development.
