New Delhi: Reliance Industries Ltd, India’s most valuable company, has signed contracts worth $4.5 billion (Rs450-crore) to develop its gas fields off southeast coast to meet its targets for producing gas from the area.
The spending will be part of $5.2 billion of investment the company plans for the area, P.M.S. Prasad, the company’s president for oil and gas, told reporters on 17 March in a briefing in Rajamundry. Gas production will start on schedule in 2008, he said.
“Investment has already been committed to ensure that all suppliers meet their deadlines, which will enable us to start gas production on target of 2008,” Prasad told reporters.
Commercially viable deposits in the fields may help Reliance meet India’s growing requirements for gas for power plants and fertilizer companies. India, Asia’s third-biggest oil market, is promoting exploration to reduce dependence on imports as prices rise to records and output declines from ageing fields.
India’s current gas supplies of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the oil ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7% to 8% a year.
Reliance Industries, owner of India’s biggest refinery, said on 1 November the gas field off the country’s east coast will produce twice the quantity previously estimated. The KG-DWN-98/3 field, discovered in 2002, will probably produce 80 million cubic meters a day, compared with the initial estimate of 40 million cubic meters.
The company has made two natural gas discoveries in fields off the country’s east coast, taking its total number of oil and gas finds in the country since 2002 to 32, Reliance said on 12 March.
The company discovered gas in a well in KG DWN 98/3 area in the Krishna Godavari basin and in NEC OSN 97/2 in the Mahanadi area, Reliance said. The discovery “demonstrates further upside potential” from the areas, the company said.