Cairn India has started a second crude oil processing plant at its giant Mangala oilfield in Thar desserts of Rajasthan, which will help the company ramp up output for the nation's most prolific oilfield.
Mangala currently produces about 30,000 barrels of oil per day (1.5 million tons a year) which is processed at Train -1 near Barmer before being sold to refiners.
"The company today initiated start up of Train-2 (second oil processing plant) which has a capacity of 50,000 bpd (2.5 million tons a year)," an industry source said.
Cairn will stabilize operations at Train-2 for the next few days and after commissioning it will help Mangala field production to ramp up to 80,000 bpd (4 million tons a year).
Despite repeated attempts, company spokesperson could not be reached for comments.
Peak output from Mangala is envisaged at minimum 1,25,000 bpd, expected in second half of this year.
Cairn output would help offset the decline in crude oil production at ONGC that could not meet its targeted output in 2009-10 fiscal.
The company can produce up to 2,40,000 barrels per day from Rajasthan fields, equivalent to output from the nation's largest oilfield of Mumbai High.
Cairn India CEO Rahul Dhir last month wrote to the Petroleum Ministry and the sector regulator DGH informing that it can produce 37 per cent more oil from the Thar dessert fields than previously thought.
"Based on our review, we estimate that the potential resource in the (Rajasthan) block is now estimated to be 6.5 billion barrels of oil equivalent in place.
This resource base provides a basis for a vision to produce 2,40,000 barrels of oil per day, subject of course to necessary approvals and additional investments," he wrote in identical letters to Petroleum Minister Murli Deora, Oil Secretary S Sundareshan and DGH Director General S K Srivastava.
The source said Cairn is building a third Train as also a 670-km heated pipeline to Salaya in Gujarat that would transport the crude from the field to refiners. Completion of Train-3 and the pipeline was expected over the next few months which will help take Mangala output to its peak.
At present, the crude from Mangala is being trucked to Kandla Port and then shipped to MRPL and RIL. Special heated trucks transport the crude from Barmer to Gujarat Coast.
Cairn already has tied up sale of 1,43,000 bpd to Government-named offtakers Mangalore Refinery, Hindustan Petroleum, Indian Oil, Reliance Industries and Essar Oil.
The source said the pipeline was expected to be commissioned during this quarter. Work on the final delivery infrastructure to each buyer was also nearing completion.
Cairn India, the operator of RJ-ON-90/1 block, commenced crude production from the Mangala field on August 29 last year. Cairn India holds 70 per cent participating interest with the remaining 30 per cent being held by Oil and Natural Gas Corp (ONGC).
Peak production from Mangala, Bhagyam and Aishwariya (MBA) -- three of the 18 oil and gas finds Cairn has made in the Rajasthan block and that are first being put to production, is expected to be ramped up to 1,75,000 bpd by 2011.
While 1,25,000 bpd is the peak output from Mangala that has been approved by the Government, Cairn last month proposed to raise plateau production to 1,50,000 bpd (7.5 million tons a year) subject to approval by the authorities.
Plateau production from the three fields has been revised upward to 2,10,000 bpd (10.5 million tons a year) from 1,85,000 bpd estimated earlier. These upgrades are, however, subject to approval of Cairn's partner ONGC, oil regulator DGH and the Government.
The source said Cairn India is in advanced stages of commissioning the 670-km heated and insulated pipeline from Barmer to the Gujarat coast, which is the world's longest continuously heated and insulated crude oil pipeline with access to 75 per cent of India's refining capacity.
