State-owned Oil and Natural Gas Corporation (ONGC) is embarking on a project to set up mini-LNG (liquefied natural gas) plants aimed at evacuating natural gas from wells in regions that lack pipeline connectivity. The initiative targets five sites across Andhra Pradesh, Jharkhand, and Gujarat, where mini plants will be established at wellheads to convert natural gas into LNG by supercooling it to minus 160 degrees Celsius.
Project Overview
The produced LNG will be transported via cryogenic trucks to the nearest pipeline, where it will be re-gasified and injected into the network for distribution to various consumers, including power plants, fertilizer units, and city gas retailers. To facilitate this, ONGC has issued a tender seeking manufacturers and service providers to harness stranded natural gas.
The identified locations for the mini-LNG plants include two sites in Rajahmundry, Andhra Pradesh, along with one each in Ankleshwar, Gujarat; Bokaro, Jharkhand; and Cambay, Gujarat. The tender outlines a call for bids from manufacturers and service providers to establish small-scale LNG plants on a Build, Own, and Operate (BOO) basis. These plants will produce LNG, transport it to consumption sites within a 250-kilometer radius, re-gasify the LNG, and inject the gas into existing distribution grids or supply it directly to bulk consumers.
Addressing Stranded Gas Challenges
ONGC emphasized that while India boasts an extensive network of pipelines connecting supply and demand centers, a significant volume of stranded gas—those not connected to pipelines—remains untapped. The stranded gas volumes can range from 5,000 to 50,000 standard cubic meters per day, with the potential for production lasting up to five years.
According to ONGC, the domestic natural gas production exceeds 90 million standard cubic meters per day, supplying energy for electricity generation, fertilizer production, and household cooking. However, domestic output only meets about half of the country’s demand, highlighting the importance of optimizing existing resources.
Strategic Partnerships and Future Developments
As India’s largest producer of crude oil and natural gas, ONGC has been investing billions to enhance production and reduce reliance on imports. Prior to this tender, ONGC partnered with Indian Oil Corporation (IOC) to set up a small-scale LNG plant near its Hatta gas field in Madhya Pradesh. This facility will initially have a capacity of 32 to 35 tonnes, sourcing 45,000 standard cubic meters per day of gas from the Hatta field.
IOC will bear the costs of the small-scale LNG plant and conduct a detailed feasibility study, while ONGC will supply gas to IOC for further distribution. This collaboration aims to optimize the use of stranded natural gas in the region.
Earlier this year, GAIL (India) Ltd announced plans for a small-scale LNG plant at its Vijaipur LPG unit in Madhya Pradesh, indicating a growing trend toward utilizing stranded gas resources.
Conclusion
With over 100 wells across the country producing volumes too small to justify pipeline investments, ONGC’s initiative to develop mini-LNG plants presents a viable solution to tap into stranded natural gas. This strategic move not only enhances domestic gas production but also helps meet the growing energy needs of the country, contributing to a more sustainable and efficient energy landscape in India.
