New Delhi: State-run ONGC and Indian Oil Corporation Ltd (IOCL) have signed a memorandum of understanding (MoU) to set up a small liquefied natural gas (LNG) plant near the Hatta gas field in the Vindhyan basin in Madhya Pradesh, ONGC said in a statement on Friday.
"The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status, upgrading it from a Category II to a Category I Basin," ONGC said.
India's sedimentary basins cover 3.4 million square kilometres and are divided into three categories. Category-I sites are those that have already started extracting hydrocarbons, while category-II sites have resources but are yet to begin commercial production. Category-III sites are those that have prospective resources awaiting discovery.
"The plant will use cutting-edge technology to produce LNG, a cleaner alternative to traditional fossil fuels, significantly reducing carbon emissions and aligning with India's climate change mitigation goals," the statement added.
The discovery at Hatta represents the culmination of five decades of sustained exploration. ONGC has already submitted its field development plan (FDP) to the Directorate General of Hydrocarbons (DGH) to monetise its assets in the Hatta area.
These efforts are aimed at increasing India's LNG production and eventually lowering imports. In FY24, India imported LNG worth $13.40 billion. In the current financial year (April 2024-May 2025) LNG imports stand at $2.2 billion, compared to $3.2 billion during the same period last fiscal year.
In FY24, ONGC reported its highest-ever consolidated net profit of ₹57,101 crore. The state-run energy major's crude-oil production in the January-March quarter of FY24 increased 2.4% over the third quarter, while gas production decreased 3%.
On 16 June, Mint reported that the Indian government is in talks with Norwegian energy giant Equinor to secure its participation in India’s strategic petroleum reserves (SPR), as part of efforts to enhance the energy security of the world’s third-largest energy consumer.
In a related move, negotiations are also ongoing for long-term deals for supply of liquified natural gas (LNG) from Equinor’s extensive portfolio in the US and Qatar, according to two people aware of the development.
“We are asking Equinor to come in our SPR, and also participate in our E&P (exploration and production) programme," one of the two people cited above said, requesting anonymity. "The discussions are ongoing. We are talking with Equinor for sourcing long-term LNG from their portfolio in the US and Qatar.”
If talks are successful, it would mark the second commitment to India’s SPR programme, following a deal with Abu Dhabi National Oil Co (Adnoc). Such deals allow India to have large amounts of crude oil in reserve for emergencies.
These negotiations come against the backdrop of continued production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, which have put global supply chains under pressure.
