Govt to get $28 bn in revenues from Reliance gas field

Govt to get $28 bn in revenues from Reliance gas field
PTI
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First Published: Wed, Apr 01 2009. 04 54 PM IST
Updated: Wed, Apr 01 2009. 04 54 PM IST
New Delhi: Reliance Industries is just hours away from transforming India’s energy landscape when it starts natural gas production from its Krishna Godavari basin fields.
Gas from the prolific KG-D6 block will not just help boost power supply from idle electricity generators starved of fuel and produce cheaper urea for agriculture, it will give the government $28 billion (Rs1,40,000 crore) in profit share and royalty over the life of the field.
“Reliance is doing last minute checks and gas (from KG-D6 block) can start flowing as early as tomorrow,” a source close to the development said.
The $8.835 billion (Rs44,175 crore) project will double domestic natural gas production when the field hits peak output of 80 million cubic meters per day in 2010. It will wipe out fuel deficit at urea making fertiliser plants and meet half of the 36 mmcmd gas shortfall in power plants.
Reliance will produce enough gas to meet about a third of UK demand, the source said.
The gas output which will start at 10 mmcmd and rise by same volume every month to reach 40 mmcmd by July end. “Our endeavour is to quickly ramp it up to peak 80 mmcmd. We are targeting the peak out by year end (2009 calendar year),” company’s head of oil and gas business P M S Prasad had stated last week. If achieved by 2009-end, the peak output will come a year earlier than previously planned.
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First Published: Wed, Apr 01 2009. 04 54 PM IST