Reliance to double KG Basin gas production

Mumbai: Reliance Industries has secured approval from the directorate-general of hydrocarbons (DGH) for doubling output at its Krishna-Godavri (KG) basin gas field, involving an overall investment of $5.2 billon.

DCH has approved the addendum to the initial development plan for the deepwater Block KG-DWN-98/3 (KG-D6) for increasing gas production there from 40-million standard cubic metres per day (mmscmd) to 80 mmscmd.

RIL had originally planned to invest $2.47 billion to produce 40 mmscmd of gas. However, with rig prices going up and more reserves being found in the block, the company raised the capex and the planned output.

The capital expenditure for the initial phase of development to produce 80 mmscmd of gas is $5.2 billion, RIL said in a statement.

Phase-I of the development will involve drilling of 22 wells. The development plan envisages commencement of delivery of first gas by second half of 2008-09, the statement added.
Together with the Phase-II commitment of 28 additional wells, the total project cost would be $8.84 billion.

The deepwater block KG - D6 in Krishna Godavari Basin off the east coast of India in the Bay of Bengal was awarded to Reliance Industries and NIKO Resources, Calgary, Canada (NIKO) under NELP 1 bidding round. Reliance Industries, as operator of the block, holds 90 per cent of the participating interest. The company made the world`s largest gas discovery in 2002 in this block.

In the KG basin, GAIL (India) is operating a gas pipeline network of 833.9 km passing through three districts of Andhra Pradesh - East Godavari, West Godavari and Krishna. The completion of the pipeline will be synchronised with the first gas from the fields. The pipeline is also expected to give gas-starved industries access to gas. The current deficit in natural gas demand-supply in the country is pegged at 100 mmscmd.