GSPC claims big gas find at its KG gas field

Mumbai: State-run explorer Gujarat State Petroleum Corporation (GSPC) has discovered gas reserves of at least three trillion cubic feet in the east coast, Gujarat chief minister Narendra Modi said during a video conference from the offshore site.

The discovery, made at the KG-22 well of Deendayal field in the Krishna Godavari basin, where GSPC found gas in June 2005, may hold  enough gas to supply the country's present needs for 2-1/2 years, he said.

Gandhinagar-based GSPC had to lower their forecasts for Krishna Godavari last year after its findings based on preliminary drillings were questioned by the oil and gas regulator, which cut its estimates to 1.38 trillion cubic feet from 20 trillion cubic feet.

The estimated output from the Deendayal field will rise after more drilling, spokesman K Prakash said in July 2007.

GSPC's two wells are located near Reliance's Dhirubhai 1 and 3 fields. The Reliance fields may together hold an estimated 9.2 trillion cubic feet of gas, according to partner Niko Resources Ltd.

Reliance Industries is investing $5.2 billion to develop the field that is expected to more than double the nation's gas consumption.

GSPC plans to invest Rs4,000 crore ($932 million) to develop the KG-8 well over three to four years, Saurabh Patel, the state's finance minister, said.

Initial production of 8 to 10 million cubic meters a day from KG-8 is expected to start in the last quarter of 2010, he said, adding, that further exploration will be needed the decide investment needs for the KG-22 shallow-water area, Patel said.