Announcement of India’s First Major Gas Development Project Receives Two Hundred Twenty-Two Million Three Hundred Thousand Dollars Loan on February 28, 1983

" FOR IMMEDIATE RELEASE. . • World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK PRESS RELEASE NO. 83/48 Contact: Hugh Blackman February 28, 1983 (202) 477-3573 India's First Major Gas Development Project Receives $222.3 million loan The first major gas development project in India will use a $222.3 million loan from the International Bank for Reconstruction and Development (IBRD). The $701.5 million project will bring production capacity in the South Bassein field (located in the Arabian Sea) to 5 million cubic meters of gas per day by June 1985. Natural gas is beco5ing increasingly important to the Indian economy with the development of the Bombay High oilfield with its associated gas flows and the South Bassein gas field which was identified and first drilled in 1976. The South Bassein Gas Development Project consists of four offshore platforms for drilling, processing, gas flaring, and living quarters for the 125 operating personnel. • A 217-kilometer-long submarine pipeline from South Bassein to Umrat and an 18-kilometer-long buried pipeline from Umrat to the Hazira fertilizer complex (the major customer initially) will be constructed by June 1984. In addition, 17-kilometer-long pipelines will be built from the South Bassein processing platform to the existing Bombay High gas transmission line and crude oi~ transmission line. The Oil and Natural Gas Commission (ONGC) will provide $179.2 million for the project, and commercial borrowings, export credits,and suppliers' credits are expected to total $250 million. By supporting the ONGC, the project will help reduce imports of petroleum, fertilizer, and petrochemicals and will i.mprove India's balance of payments situation. The Kuwait Fund will provide a $50 million loan. Previous Bank assistance to India's petroleum sect0r includes two IBRD loans totalling $550 million for the development of the offshore Bombay High oilfield. In May 1982, a $200 million loan was approved for a refinery rationalization project. In October 1982, a loan of $165.5 million was approved for petroleum exploration in the Krishna-Godavari region. The IBRD loan is for 20 years, including five years of grace, at an interest rate linked to the cost of Bank borrowing. The loan also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 1.5% on the amount of the loan. • NOTE: Money figures are expressed in U.S. dollar equivalents •