L&T, partners win mega KG basin deepwater project from ONGC

Larsen & Toubro said it, along with its consortium  partners Baker Hughes and McDermott International, has won the contract for constructing one of India’s largest deepwater oil and gas projects.

The contract is for construction at ONGC’s KG DWN-98/2 basin that lies close to the KG-D6 block of Reliance Industries.

“The integrated subsea package includes the supply of all subsea production systems (SPS), including 34 deepwater trees, and the installation of subsea umbilicals, risers and flowlines (SURF) at a water depth of between 984 feet (300 meters) and 10,500 feet (3,200 meters),” India’s largest construction company said.

The subsea award represents the largest single subsea contract awarded by ONGC and involves construction at depths of up to 3 km below the sealevel.

Delivery is scheduled for 2020 for the gas system and 2021 for the oil system.

The project, one of the first major deepwater developments in the country, could radically alter the hydrocarbon landscape of India.

ONGC did not specify the financial size of the contract or what its own share will be, in terms of revenues.

However, it said its share of work includes  fabrication engineering, procurement and coating of around 500 kms linepipes.

It is also responsible for fabricating the stalk pipeline of around 300 kms and the fabrication, testing and load-out of around 185 subsea structures including 6 subsea manifolds and onshore pipeline installation.

It said it will use its fabrication facility at Kattupalli, Chennai to fabricate the subsea production manifolds and SURF structures, besides undertaking stalk fabrication of linepipes.

The project poses a big challenge for both ONGC as well as the development partners due to the way the KG-D6 block turned out.

Once considered the answer to India’s energy woes, production from the Reliance-owned block has been anywhere near the estimates. The operator has blamed structural issues, such as water and sand ingress, for the troubles.

Given the background, ONGC and its partners will have to be extra careful to ensure that the potential of the block is realized.

“By reducing the number of interfaces across the project, the consortium aims to reduce complexity, drive speed and increase execution efficiency for ONGC,” L&T said.

As part of the project, L&T and Baker Hughes, part of GE, will fabricate manifolds for the first time in India as part of this project, it added.

L&T has been a supplier to ONGC for over three decades. The deal comes close on the heels of the delivery of another deepwater project, S1-Vashistha.