ONGC scraps Daman upside gas field development plan

Oil and Natural Gas Corporation (ONGC) has scrapped the plans and bids it received for its Daman upside gas development project off the western coast due to high price quotes, as per the report of Economics Times.

The project is crucial for the company’s strategy to increase the gas production from its shallow-water fields off India’s west coast. Once the project is completed, it would lead to nearly doubling of current gas production of 4-5 million standard cubic metres per day.

As per various reports, the bids received by ONGC for the project were higher than the estimates of the company; hence, the tenders have been cancelled. The tender would now be divided into separate packages and rebid.

Engineering and fabrication contractor Larsen & Toubro (L&T) emerged as the lowest bidder when the bids were opened in December last year.

L&T’s quote of USD 663.37 million was 36.77 per cent higher than ONGC’s revised internal estimate of USD 485.03 million.

L&T offered a USD 1 million discount but this was not acceptable to ONGC, they said, adding that ONGC could have tolerated a maximum variation of 20% over the internal price estimate.