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ONGC lines up major tender for Daman Upside

State-run Indian giant believed to be working on bid documents for EPCI job worth about $1 billion as it aims to ramp up output from shallow-water fields off west coast of country

India’s state-controlled Oil & Natural Gas Corporation (ONGC) is preparing to fire the starting gun on a substantial offshore tender process involving the further development of its Daman gas project on the west coast, with the contract likely to be valued at about $1 billion.

Project observers told Upstream that ONGC is understood to be working on tender documents for the Daman Upside engineering, procurement, construction and installation package and is expected to begin the bid process within the next couple of months.

The Daman Upside project is crucial to ONGC’s strategy to ramp up gas production from its shallow-water fields off India's west coast.

The work scope is expected to be substantial but has yet to finalised by ONGC, one source suggested.

The offshore infrastructure is expected to centre on a new process platform, B-12, that will be bridge-linked to the existing B-12-11 wellhead platform.

In addition, a new living quarters platform meant for up to 100 people and a new flare tripod are likely to be commissioned by the Indian giant.

The project also envisages at least four new wellhead platforms — B-12-18-PA, B-12-18-PB, B-12-2-P and B-12-24-P.

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Several segments of subsea pipelines are also expected to be included in the project, with one source indicating that up to 150 kilometres of offshore lines could be involved.

The weight of the offshore structures to be installed by ONGC could not be confirmed by Upstream.

Sources suggested that ONGC is currently in the process of fine-tuning the work scope and there could be some modest sc,aling down of facilities to optimise costs.

One source suggested that on an optimistic note, the Daman Upside development could be tendered as early as next month, but also cautioned that finalising the bid process may take a couple more months yet, pushing the project out towards the fourth quarter of this year.

ONGC is already producing natural gas from Daman and is thought to have spent almost $1 billion setting up offshore infrastructure at the field over the past three years.

The initial Daman project started producing in 2016 and its output is reported to have averaged between 4 million and 5 million cubic metres per day of gas during the most recent financial year in India, which concluded in March.

While the exact upside potential of the most recent Daman development could not be confirmed, one industry source suggested that the Daman Upside project could produce up to 10 MMcmd of gas over the next three to four years.

The existing Daman development involves the exploitation of the B-12 and C-24 marginal gas fields, off the country’s west coast.

The Upside EPCI contract is likely to be awarded by ONGC by December this year and the Indian giant aims to commission the project as early by March 2022.

Several leading domestic and international EPCI contractors are expected to compete for the Daman job.

Some of the players that are likely to join the race are Indian engineering giant Larsen & Toubro (L&T), compatriot Afcons, Malaysia’s Sapura Energy, Vietnam’s PTSC, Abu Dhabi’s National Petroleum Construction Company, Italy’s Saipem, US giant McDermott and potentially other yards from Asia.

The Daman fields are located in the Tapti-Daman block in the Mumbai offshore area, about 60 kilometres off Daman.

The initial phase of the Daman development included seven wellhead platforms, a riser platform, subsea pipelines and associated offshore infrastructure.

Singapore-based Swiber was awarded a $300-million-plus contract by ONGC in 2015 to develop the offshore facilities.

However, the Singaporean contractor could not complete this work scope because it was placed under judicial review a year later in 2016.

ONGC subsequently re-tendered the project in 2017, offering a contract covering the transportation, installation and commissioning of pre-fabricated piles and conductors, plus several wellhead platforms fabricated by Vietnam's PTSC through a sub contract.

L&T won the transportation and installation contract for the remaining work on the field development in 2017, securing a contract worth 1150 crore rupees ($176.6 million), Upstream was told.

This contract also involved some unfinished work including platform modifications and procurement of some pipeline sections from the original Swiber deal.

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