RIL, BP to submit revised investment plan for KG-D6 gas finds
New Delhi: Reliance Industries Ltd (RIL) and its partner BP Plc. of the UK will by year-end submit a revised investment plan for the four satellite gas discoveries in the KG-D6 block by integrating their development with two other nearby finds.
Senior executives in the joint venture said four deep sea satellite gas discoveries—D-2, 6, 19 and 22 are planned to be developed together with D29 and D30 finds in the Krishna Godavari basin of KG-D6 block.
The four satellites and the other two finds (D29 and D30), R-Series and MJ gas discoveries, are the ones on which RIL and BP had in mid-June this year announced investing Rs40,000 crore to reserve flagging production from KG-D6 block.
They said development of the six satellite finds are being taken up together while D-34 or R-Series and D-55 (MJ) would have separate development plans. The government had in 2012 approved a $1.529 billion plan to produce 10.36 million standard cubic metres per day of gas from four satellite fields of block KG-DWN-98/3 (KG-D6) by 2016-17.
The four fields have 617 billion cubic feet of reserves and can produce gas for eight years. However, the companies did not begin the investment citing uncertainty over gas pricing. Now that the government has allowed a higher gas price of $5.56 per million British thermal unit for yet-to-be developed gas finds in difficult areas like the deep sea, RIL and BP have decided to take up their development.
This rate is comparable with $2.48 per mmBtu for currently producing fields. The executives said these four finds are now been clubbed together with D29 and D30 discoveries, which had been held up over conformity tests. They however did not give investment numbers saying a slump in global energy prices and services market will only see lesser amount of money being spent.
RIL-BP combine do not plan to alter the $3.18 billion investment plan for D-34 or R-Series gas field in the same block, which was approved in August 2013. About 12.9mmscmd (million metric standard cubic metre per day) of gas for 13 years can be produced from D-34 discovery, which is estimated to hold recoverable reserves of 1.4 trillion cubic feet. A separate development plan for the MJ find would be submitted by mid-2018, they said.
RIL has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3— the largest among the lot—were brought into production from April 2009, but output has fallen sharply from 54mmscmd in March 2010 to 3-4mmscmd. MJ is the only other field that was put to production. Together, the three fields now produce 6.4mmscmd.
Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.