India’s Oil & Natural Gas Corporation (ONGC) has awarded a multimillion-dollar contract to a leading contractor for a key package in the eighth development phase of its pipeline replacement project (PRP-8) offshore western India.
The PRP is ONGC’s flagship offshore project, undertaken every two years to enhance the pipeline infrastructure at some of the company’s largest fields.
The PRP-8 project is essential to ONGC’s goal of increasing production from its maturing oil and gas fields off India’s west coast.
ONGC recently awarded a $283 million engineering, procurement, construction, and installation (EPCI) contract to Larsen & Toubro (L&T) for work on Package-B of the PRP-8 project, according to sources familiar with the development.
“A Notification of Award for the PRP-8 contract has been recently placed by ONGC, with work likely to commence within weeks,” one source noted.
Package B involves the EPCI of nearly 140 kilometers of pipelines to be laid across multiple offshore west coast assets.
The other key PRP-8 project, Package A, involving the EPCI of more than 90 kilometers of pipeline, is yet to be awarded by ONGC, the source added.
Another source indicated that ONGC awarded Package B first, as the EPCI project is within ONGC’s budget, while a significant budgetary price difference remains for Package A.
L&T was the only commercially qualified bidder for the PRP-8 project after ONGC disqualified Nigeria’s Westfield Energy.
ONGC and L&T have not yet responded to Upstream’s questions on the PRP-8 award.
Three key west coast offshore assets — Mumbai High, Bassein & Satellite, and Neelam Heera — are targeted by ONGC in PRP-8. These fields are well-developed, with extensive infrastructure of wellhead platforms, process platforms, and pipelines.
“With the ageing of the field, the condition of some of its existing pipelines has deteriorated. The company is planning for the replacement of these pipelines in a phased manner,” according to an ONGC document. Additionally, it plans to lay new pipelines for better field management.
ONGC’s west coast offshore fields are maturing and require multiple redevelopment phases to maintain their production profiles.
The company has carried out seven expansion phases of the PRP over the past decade. In 2022, L&T won a significant contract for the seventh phase, involving the EPCI of 350 kilometers of subsea pipelines and related offshore works. This contract was believed to be worth close to $500 million.
In 2019, Valentine Maritime won a contract for the sixth expansion phase, valued between $150 million and $170 million. Malaysia’s Sapura Energy won a subsea pipeline contract in 2018 for the fifth phase, also known as the subsea wells and pipeline replacement project (SSPRP-5). In 2017, ONGC awarded L&T a $200 million contract for PRP-4, which had been left unfinished by Singaporean contractor Swiber Offshore.
ONGC has ambitious plans to set up multiple offshore facilities in India, with combined investments likely to be around $11 billion. The company is also advancing a key project to replace more than 130 ageing platforms off the country’s west coast. Within weeks, ONGC is expected to launch a tender to select a design engineering consultant for replacing 35 to 40 platforms.
Domestic crude production has been dwindling in recent years, and ONGC is under increasing pressure from the government to boost its oil output and reverse the decline. Other main projects targeted by ONGC in the west coast region in the coming years include developments of the Ratna and R-Series and North Tapti fields, the Cluster 9 development, the B-193 phase two project, platform makeover projects, and the MB0SN-2005/1 development.