First crude oil offtake from new FPSO represents ‘historic achievement in India’s energy sector’

March 4, 2024, by Melisa Čavčić

India’s government-owned energy giant Oil & Natural Gas Corporation (ONGC) has held a flag-off ceremony for the first crude oil offtake from a floating production, storage, and offloading (FPSO) vessel, which is working at what is said to be the first deepwater development located off India’s east coast.

FPSO Armada Sterling V; Source: Shapoorji Pallonji Energy (SP Energy)

Following the FPSO Armada Sterling V’s first oil at the Block KG-DWN 98/2 development project on the east coast of Kakinada offshore India, Shri Narendra Modi, India’s Prime Minister, flagged off the first crude oil tanker Swarna Sindhu from ONGC’s Krishna Godavari deepwater block. This project is anticipated to add 7% to India’s oil and gas production at its peak production level.

The flag-off ceremony, organized in Begusarai in Bihar, was graced by Bihar Governor, Shri Rajendra Vishwanath Arlekar; Bihar Chief Minister, Shri Nitish Kumar and Shri Giriraj Singh, Minister of Rural Development and Panchayati Raj Department and MP, Begusarai Loksabha constituency along with Shri Hardeep Singh Puri, India’s Minister for Petroleum & Natural Gas and Housing & Urban Affairs, along with senior dignitaries from Petroleum Ministry, Shri Arun Kumar Singh, Chairman and CEO of ONGC and the firm’s directors.

Developed with an investment of over 41,000 crore rupees (around $4.95 million), ONGC claims that the KG-DWN 98/2 deepwater oil field M in Krishna Godavari Basin is one of the most technologically complex projects. The total anticipated daily peak gas and oil production from the project is about 10 million standard cubic meters per fuel or 45,000 bopd.

The Indian giant had all subsea structures fabricated by Indian manufacturers at Kattupalli in line with the Prime Minister’s vision of an energy Aatmanirbhar Bharat, which translates to ‘self-reliant India.’ The extraction of the first oil from the KG Basin marks “a historic achievement in India’s energy sector, promising to significantly reduce our dependence on energy imports. The project also heralds a new era in India’s energy sector, promising to bolster energy security and foster economic resilience,” according to ONGC.

During its life cycle, the project KG-DWN-98/2 Cluster-II will add a total of 30.5 bcm of gas and 14.24 million tons of oil to the Indian domestic oil and gas production, helping the government of India to reduce the dependency on crude and LNG import. The FPSO Armada Sterling V is owned by a joint venture, encompassing SP Energy (70%) and Malaysia’s Bumi Armada (30%). This is Shapoorji Pallonji’s fourth FPSO and its third one for Indian waters.

While confirming ”the groundbreaking achievement of first crude oil offtake” from the FPSO Armada Sterling V, Shapoorji Pallonji confirms Modi’s inauguration of ONGC’s KG-DWN-98/2 field in which the FPSO is located. The firm explains that India’s Prime Minister flagged off the tanker carrying crude extracted by the FPSO Armada Sterling V.

The company further noted: “This remarkable FPSO is set to boost Aatmanirbhar Bharat, poised to add 7% to India’s oil production. The FPSO is the largest floating installation in the Indian subcontinent.

“The project’s success not only reduces India’s annual import bill by up to USD 3.5 billion but also opens doors for our engineers to tap into the USD 20 billion global FPSO market. The FPSO sets a new standard in sustainability with zero flare, minimal emissions, and seawater cooling.”