India - Gas Flaring Reduction Project

AJ ~L3 y5 , L_ /!\J Document of The World Bank F'OR OFFICIAL USE ONLY Report LNo. 9305-lN STAFF APPRAISAL REPORT INDIA GAS FLARING REDUCTION PROJECT MAY 31, 1991 Transport and Energy Operations Division Country Department IV Asia Region This document has a restricted distribution and may be used by recipients only in the nerformance of their official duties. Its contents may not etherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (As of January 15, 1991) Currency units = Rupees (Rs) One Rupee = US$ 0.051 (approx.) One US Dollar = Rs 19.43 MEASURES AND EQUIVALENTS I Million cubic meters of gas = 37 million cubic feet of gas = 6,*n500 barrels of oil = 890 mt of oil = 1,940 mt of (Indian) coal ABBREVIATIONS AND ACRONYMS ADB - The Asian Development Bank bbl - barrels BcFm billion cubic meters BICP - Bureau of industrial Costs and Prices CIL - Coal india Ltd. ECA - export credit agencv Ell. - Encgineers India Ltd. GAIL - Gas Authority of India Ltd. GOI - Government of India cOR - gas/oil ratio HBJ - Hazira-Bijaipur-Jagdishpur gas pipeline ICB international competitive bidding IOC - Indian Oil Corporation Ltd. 1-EXIM - The Export-Import Bank of Japan kgoe kilograms of oil equivalent km - kilometer LICB - limited international competitive bidding LNG - liquefied natural gas LPG - liquefied petroleuim gas NGL - natural gas liquids MMCMD - million cubic meters per day MMCM - million cubic meters per year MOEF - Ministry of Environment and Forests mt - metric ton MW - megawatt OIL - Oil India Ltd. ONGC - Oil and Natural Gas Commission FISCAL YEAR April 1 - March 31  i F)OR OFFICIAL USE ONLY INDIA GAS FLARING REDUCTION PROJECT Loan and Project Summary Borrower. Oil and Natural Gas Commission (ONGC) Guarantor India, acting by its President Amount: US$450.0 million equivalent Terms: Repayment over 20 years, including five years of grace, at the Bank's stan- dard variable interest rate. ONGC would bear the foreign exchange and interest rate risks. Guarantee Fee: The Government of India (GOI) would charge a guarantee fee of 1% p.a. on the outstanding amount of the Bank loan. Project Description: The objectives of the project are: (a) to eliminate the flaring of about 12 million cubic mneters of associated gas per day (MMCMD) in the Bombay High oil field and improve the management of the Bombay High reservoir in order to arrest the decline of oil production and optimize the ultimate recovery of hydro- carbons; (b) to reduce energy shortages and contribute to greater efficiency of energy use in India's Westem Region; and (c) to promote a greater participation of private oil companies in India's oil and gas sector. The project is designed to recover about 25.3 MMCMD of additional gas from the Bombay High oilfield. The infrastructure facilities that will be constructed under the project will make it possible for ONGC to transport up to 29 MMCMD of additional gas supplies from offshore fields in the Western region to the Hazira gas terminal in the State of Gujarat and to Uran, near Bonmbay. The project, which has been designed consistent with environmentally sound principles, includes: * erection of two process platforms; * construction of three submarine pipelines: i.e. (i) a 28 inch pipeline from the southern sector of the Bombay High oilfield to the South Bassein gas field, (ii) a 42 inch ripeline from the South - Bassein gas field to the Hazira gas terminal, ..i (iii) a 30 inch pipeline from the southern sector of the Bombay sHiL., oil field to the Heera oil field where it connects with the Heera - Uran trunkline; * the expansion of the existing gas terminal at Hazira to process the This document has a restri, ted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization,  ii additional gas supplies. This will nearly double the current capacity of the terminal.