Cairn India II

completed

Since 2004 Cairn India Limited and its subsidiaries (“Cairn” or the “Company”) have made a number of significant discoveries in its hydrocarbon block RJ-ON-90/1 in Rajasthan, northwest India (the “Rajasthan Block”). The proposed Project will consist of (i) the development of Cairn’s discoveries in Rajasthan Block including the construction of a crude oil processing facility; and (ii) the development of an approximately 600 km crude oil pipeline to transport oil from the Rajasthan Block to the western coast of India in Gujarat.In Rajasthan the pipeline passes through semi-arid to arid areas in which the physiography is desert like, including sand dunes covered by sparse xerophytic vegetation. Agricultural practices mainly include extensive livestock production and limited rainfed crop production (mostly millets). Rainfall is seasonal (monsoons) and mean annual precipitation ranges between 200-500 mm. The settlement pattern consists largely of scattered households (dhanis) and small towns, and the pipeline has been sited to avoid resettlement of any households.In Gujarat mean annual precipitation is higher and ranges between 500-800mm, and consequently there is an improved range of vegetation cover. Most of the area is utilized for cropping (rainfed and irrigated) and a wide range of crops are grown, including millets, cereals, pulses, cotton, sugarcane and oilseed. Livestock production is more intensive in Gujarat, including dairy farming. The settlement pattern in the vicinity of the pipeline consists mainly of rural villages and small towns. The pipeline will mainly traverse agricultural and pastoral land, and some barren land, and does not pass through any settlements, and thus resettlement of any households has been avoided.Oil and Gas field developmentCairn has a 70% interest and operates the Rajasthan Block. Oil and Natural Gas Corporation (ONGC), India’s state owned oil and gas company holds the remaining 30%. The Rajasthan block is located within the districts of Barmer and Jalore. The total current development area of the block is 3467 km2, and within the block the fields of Mangala, Bhagyam, Aishwariya, Saraswati, and Raageshwari form the core development area. The Mangala, Bhagyam and Aishwariya fields are located in the northern part of the block, and the Saraswati, Raageshwari, and Raageswari gas fields are located in the central part of the block.As part of the drilling operation program, Cairn has drilled over 140 exploratory and appraisal wells in the various fields. These wells may also be converted into production or injection wells.The development plan for the Mangala, Aishwariya and other southern fields includes drilling over 550 wells, which will comprise of production and injection wells. Based on the current estimate the production potential from these fields is over 135000 barrels of oil per day (bopd). The Raageshwari gas field will be used in it’s entirety for captive power generation. In addition it is proposed to produce up to 40,000 bopd from the Bhagyam field, located approximately 17 km from the Mangala terminal. The Bhagyam field will be developed as a satellite to the Mangala field, and the well fluid will be transferred by pipeline to be processed at the existing Mangala Processing Terminal (MPT). The development of the oil and gas fields envisions multi-well pads which will comprise many well heads at one location and the flow lines from each well head will be brought to a common manifold before flowing to the Central Processing Facility (CPF). The development of all the fields is expected to occur in close sequence commencing with the Mangala, Saraswati and Raageshwari fields followed by the Bhagyam and Aishwariya fields. The Mangala field development plan will entail the drilling of development and injection wells, installation of a Central Processing Facility (CPF) called the Mangala Processing Terminal (MPT) including the Central Tank Farm (CTF), Interconnecting Pipeline Corridor, saline water treatment plant, captive power generation plant, waste management facilities. The main CPF and CTF located in the MPT will be common to the Mangala and Aishwariya fields and will cater to the Bhagyam field. The interconnecting pipelines will connect the well pads and the processing facilities within the various fields. Interconnecting pipelines will also be installed from the southern field to the northern field and a dedicated gas pipeline from the gas field in the south to the facilities in the north. Additionally, there will be a natural gas pipeline to feed the captive power plant. Interconnecting pipelines will be also installed from the saline water well field to the Mangala Processing Terminal (MPT) and the RO reject stream pipeline from the MPT to the injection field. The length of the interconnecting pipelines is expected to be approximately 300 km.Mangala fieldThe Mangala field, based on current estimates, has the potential to produce approximately 125000 bopd. The production process will consist of the well fluid being transported through buried pipelines located within the pipeline corridor connecting the well-pads to the MPT. The produced water generated after well fluid processing at the MPT, will be transported to the produced water treatment plant located within the MPT for treatment. After treatment and co-mingling with the de-salination plant reject stream it will be re-injected back into the reservoir through injection wells. The associated gas generated will be treated for the removal of CO2, gas dehydration, compression and piped to the Captive Power Plant (CPP). Bhagyam FieldThe Bhagyam field is located about 17-km from Mangala Process Terminal (MPT), and is planned to be developed as a satellite field and integrated into the MPT for processing, storage and export of the crude oil. The Bhagyam field development plan envisages setting up of 15 well pads across the Bhagyam field area and drilling up to a maximum of 81 wells. The current estimates indicate a potential for production of up to 40,000 bopd of crude oil. Aishwariya fieldThe current Aishwariya development plan estimates a contribution up to 10000 bopd and will share the CPF and CTF with the Mangala fields. It is expected that the Aishwariya field will have up to 8 well pads.Other FieldsThe smaller fields spread across the RJ-ON-80/1 block will essentially be developed as stand-alone production facilities. These fields are presently estimated to have a comparatively lower production potential. Raageswari Gas fieldThe Raageswari gas field will have up to two well pads, and the gas collection and processing facility will be located in the Raageswari oil well pad location. The field is being developed to meet the fuel requirements of the Rajasthan field development. Oil Pipeline from Mangala Terminal in Barmer, Rajasthan to Salaya Terminal in Jamnagar, GujaratCairn in association with the Oil and Natural Gas Corporation (ONGC) will build an onshore oil evacuation pipeline of approximately 600 km in length with associated facilities from Mangala terminal, located in Barmer, Rajasthan to Salaya terminal in Jamnagar, Gujarat. The proposed pipeline development will incorporate the following components:Building of an approximately 600 km long 24 inches diameter insulated buried pipeline and an 8 inch diameter gas pipeline;Setting up of associated facilities including thirty two (32) heating stations with captive power generation facilities (approx. 1 MW) and four (4) pigging stations along the pipeline route;Establishment of storage, handling and pumping stations at two locations with captive power generation , namely Viramgam Terminal (8 MW) and Salaya Terminal (10 MW).