ONGC Shares Rise In Early Trade As Daman Project Starts Gas Supply

Oil and Natural Gas Corporation (ONGC) shares rose in early trade on Monday after the company began commercial gas supply from its offshore Daman facility, even as the broader market declined.

At 9:51 am, ONGC shares were trading 1.74% higher at ₹286.85 a piece on the National Stock Exchange (NSE). The stock is 19% up year-to-date, thus making it one of the top gainers.

Commercial Gas Supply From DUDP

The trigger was the start of the commercial supply of gas from the Daman Upside Development Project (DUDP), a key offshore asset. ONGC said in a stock exchange filing that gas began flowing on Sunday from Platform B-12-24P to its Hazira plant.

The DUDP project, built with an investment of around $1 billion, marks a fresh addition to ONGC’s producing assets. The company said it completed the development in under two years. It cited tight project execution and the use of new drilling methods behind the project’s successful execution.

The field is located about 180 kilometres (km) northwest of Mumbai and around 80 km south of Pipavav in Gujarat. ONGC had first started production from the block in August 2016. The latest development is part of a phased expansion plan, with output expected to rise gradually.

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Supply Boost Amid Import Disruptions

The fresh gas supply comes at a time when imports have turned uncertain. Shipments from the Persian Gulf have been hit over the past month after the Iran conflict began. Only limited cargoes are moving through the Strait of Hormuz.

India relies heavily on the Gulf to meet its gas needs, making any disruption a concern for supplies. The supply uncertainty has prompted the government to push domestic producers to increase output. ONGC’s new production adds to that effort.

Sources:

NDTV Profit

Free Press Journal