Hindustan Oil Exploration has started gas production from Dirok field in Assam, with an initial output of about 10 million standard cubic feet per day.
The company plans to double output by the end of this fiscal.
P. Elango, managing director of Hindustan Oil, told The Telegraph that the company was selling the gas to Brahmaputra Cracker and Polymer Ltd.
"The price realised is government mandated $2.48 per million British thermal unit. The production cost would be about 60 cents per million British thermal units and the prevailing government fixed gas price would make the project profitable," Elango said.
He said the initial drilling of six wells had enabled the company to find an estimate of the total reserves.Hindustan Oil would now submit a new field development plan.
The government, in May 2015, had approved a $82 million field development plan for Dirok.
Hindustan Oil in the plan had proposed the completion of three existing wells and the drilling of one more well, along with a 25km pipeline and a gas processing plant.
Subsequently, the company got approval to drill two additional wells.
The company is building facilities that can deliver 36 million standard cubic feet of gas (equivalent to 1 million standard cubic meters per day) and over 1,000 barrels of condensate per day, nearly doubling the initial estimated volume of 20 mscfd stated in the approved field development plan. The condensate would be piped to the Digboi refinery.
Production from Dirok will be over 12 per cent of total gas production in Assam. About 8 mmscmd of gas is produced in Assam currently.
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