Upstream | Downstream | Operations Map

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.

Key dates

1995
Mahanagar Gas Ltd (MGL) formed

1997
Majority stake in GGCL acquired

2002
Enron Oil and Gas India Limited acquired and thereby a 30% participating interest in the Panna/Mukta and Tapti (PMT) fields

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

2008
New agreements signed with GAIL to take PMT gas production

Farm-ins to Blocks KG-DWN-98/4 and MN-DWN-2002/02 off the Indian east coast signed

BG Group has held a 30% interest in the mid and south Tapti gas fields and the Panna/Mukta oil and gas fields since 2002. In 2008, the combined fields produced around 15.5 mmboe (net to BG Group). Gross production from PMT fields has doubled in the past five years since BG Group took over the management of technical operations. BG Group’s aim is to optimise recovery from the PMT fields through ongoing field development as well as new projects.

The Panna infill programme (26 wells) was successfully completed in 2006 and has increased 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 2007. The EPOD for Panna also involved the drilling of 21 wells, which completed in third quarter 2008.

Panna K started production in August 2009 and the south-west Panna installation is scheduled to be completed by end first quarter 2010. Future developments will focus on development of Panna L and the next phase of the Mukta reservoir (Mukta B).

The fourth wellhead platform on the south Tapti field became functional in 2006, helping to maintain a 250 mmscfd production rate. In 2007, the next phase of development of the mid Tapti gas field was completed and first gas produced. The new facilities enabled the supply of an additional 200 mmscfd of gas to markets in the western region. The total gas supplied increased to 450 mmscfd along with 7 000 bbls of condensate. Current production is 300 mmscfd of gas and 4 100 bbls of condensate. A further three development wells are planned in Tapti by end first quarter 2010 to improve recovery from the fields.

From April 2005 to March 2008, gas produced from the PMT fields was sold 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 gas deliverable from the PMT fields, BG Group and other PMT co-venturers entered into a gas sales agreement with GAIL to supply gas from the PMT fields.

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% and is operator of the block.

In 2008, BG Group signed two farm-in agreements with ONGC to acquire a participating interest in two deep water blocks off the Indian east coast – a 30% interest in KG-DWN-98/4 block and a 25% interest in MN-DWN-2002/02 block.

Gujarat Gas Company Limited (GGCL) 

BG Group has a 65.12% controlling stake in GGCL, with the remaining 34.88% publicly owned. GGCL is India’s largest private sector natural gas distribution company in terms of sales volume. GGCL currently has more than 255 000 residential, commercial and industrial customers and fuels CNG to more than 95 000 NGVs.

In 2008, its distribution sales volumes were 1 093 mmcm (2007 1 202 mmcm), the slight decline being due to constraints in gas availability. Despite this decline, GGCL was able to grow revenues and profits through optimisation of sales mix to the markets and enhancement of gas margins. Demand for gas in the company’s markets exceeds supply and GGCL continues to make efforts to contract additional gas to enable growth, including gas from the RIL D-6 fields on the east coast and short-term LNG.

In April 2008, following the re-nomination of GAIL as the government of India nominee to purchase PMT gas production, an agreement was entered into with GAIL for it to supply gas to GGCL. The current supply level is 1.85 mmscmd. GGCL meets the rest of its requirements from a range of suppliers.

Investment to enlarge and upgrade GGCL’s pipeline network and associated infrastructure continued throughout 2008. In 2008, the Ministry of Petroleum and Natural Gas confirmed GGCL’s status as an entity authorised by the government of India to lay, build and operate city gas distribution networks in the cities of Surat, Bharuch and Ankleshwar in south Gujarat.

GGCL is in the process of receiving its regulatory authorisation from the downstream regulator for its City Gas Distribution network in the districts of Surat and Bharuch and for its 73 kilometre high pressure Hazira-Ankleshwar transmission pipeline.

Mahanagar Gas Ltd (MGL)

MGL is based in India’s commercial capital, Mumbai. It is India’s largest gas distribution company in terms of size of customer base. BG Group and GAIL (India) each have a 49.75% stake in MGL, with the residual stake held by the government of Maharashtra.

MGL’s 2008 volumes rose 9% to 550 mmcm (2007 506 mmcm). Volume growth was supported by the expansion of CNG through the installation of five new refuelling outlets and the conversion of public transport buses to CNG, taking MGL’s total number of outlets to 136. There are 685 dispensing points in Mumbai, Thane and Mira-Bhayander which serve 192 000 vehicles (as at 30 June 2009).

MGL owns and controls around 2 700 kilometres of pipeline and has been extending its network beyond Mumbai into the neighbouring cities of Thane, Mira-Bhayander and Navi-Mumbai. As a result, the number of connected domestic customers has risen to 374 500 as at 30 June 2009.MGL also supplies gas to 1 032 commercial and industrial establishments in Mumbai.

Following the introduction of regulation into City Gas Distribution (downstream business), MGL has received confirmation from the regulator for the operation of its business in the Greater Mumbai City area and the surrounding areas to the east – Navi-Mumbai plus the conurbation of Ambernath-Kalyan, an area identified for major growth in the next two to three years.

To support the large business expansion plans of the company, MGL is in the final stages of signing gas supply purchase contracts for the supply of additional gas from the RIL D-6 gas field and from the C Series gas fields operated by ONGC.

The construction of the second City Gate Station at Mahape is due for commissioning in September 2009. It will link MGL to the national pipeline network, thereby providing access to all the major sources of gas and greater security of supply.