In a meticulous, yet simple and brief ceremony presided over by Shri. Narendrabhai Modi, Honb’le CM of Gujarat at 3:00 PM on 12th June 2002 in Sachivalaya, Gandhinagar, a historic agreement was signed between M/s CAIRN Energy India Pty. Limited (CEIL) and Gujarat Maritime Board (GMB) for Right of Use (RoU) to lay down a gas pipeline within the port limits of Magdalla off Suvali village in Surat district for the purpose of transporting gas from their Lakshmi gas field to consumers in the state of Gujarat.

     The total length of the 24-inch pipeline from Lakshmi field upto the Land Fall Point (LFP) at Suvali is 32 KM out of which 13 KM is passing through the Magdalla port limits. The discovery of gas took place some time in May 2000 in Lakshmi located about 12 KM southwest of Hazira point in the Gulf of Khambhat. It is expected that this field will produce gas at the rate of 3.4 million cubic metres per day.

     The Government of India, under a Production Sharing Contract (PSC) dated 30th June 1998, awarded the CB-OS/2 Block in the Cambay Off-shore Basin on the west coast of India, located in the Gulf of Khambhat to the Joint Venture consisting of Oil & Natural Gas Corporation Limited (ONGCL), Tata Petrodyne Limited (TPL) and Cairn Energy India Pty Limited (CEIL) – of which CEIL is the Operator. Lakshmi is the first discovery in this block.

    India has been the predominant focus of CEIL’s extensive exploration programme during 2001 and 2002. Approximately 400 million US $ have been spent in this programme until now which clearly demonstrates CEIL’s commitment to offshore development in India. Nine hydrocarbon discoveries have been made, which comprise five offshore discoveries in eastern India and three western India offshore discoveries and one onshore discovery in western India. One of these western India offshore discoveries is the Lakshmi gas field. The investment in Gujarat alone has been

     This discovery has been developed using two offshore platforms, from which gas will be brought onshore via an offshore pipeline for processing at the onshore gas processing plant at Suvali village before being delivered to markets within the State of Gujarat. The onshore pipeline connections from Suvali to the Gujarat State Petronet Limited (GSPL) and Gujarat Gas Company Limited (GGCL) network are being prepared by GSPL.

     The offshore drilling and construction activities are essentially complete and the onshore construction activities are well advanced. The granting of this permission is an important milestone to start producing gas from the Lakshmi field by August 2002.

     The consortium has entered into agreements to sell gas to Gujarat Powergen Corporation (GPEC) and Gujarat Gas Company Limited. The Lakshmi gas will represent a significant contribution to the growing energy demand within the state. One of the benefits of Lakshmi gas is that it can replace more costly naphtha, ultimately resulting in reduced costs and increased efficiency for industry. Gas sold to the two buyers will incur sales tax charges, which will be paid direct to the Gujarat State thus providing additional benefit to the State of Gujarat from the project.

     Additionally, the construction of the onshore gas processing facilities has already created significant opportunities for local companies and the future operation of the gas plant has resulted in a total of about 50 additional employment opportunities for skilled Indian personnel.
Finally, the discovery and development of Lakshmi field in a little over two years is an outstanding achievement by any standards and would not have been possible without the full support of cairn Energy’s consortium partners, the Union and state regulatory authorities and above all, the work force, who have continued to work steadfastly under what at times have been very difficult conditions.

     A significant achievement is that by augmentation of Gas and broadening of the choice of fuel for power sector the cost per unit of power generated in the State of Gujarat will go down. In that sense, this development will contribute towards making the power sector in Gujarat more viable in times to come.