BackRIL, BP submit revised investment plan for KG-D6 gas finds
RIL and BP plan to develop four deep sea satellite gas finds, together with two other nearby finds, in the Krishna Godavari basin
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New Delhi: Reliance Industries and its partner BP Plc. of UK on Monday submitted a revised investment plan for bringing to production the satellite gas discoveries in the flagging KG-D6 block.
RIL and BP plan to develop four deep sea satellite gas finds, named D-2, 6, 19 and 22, together with two other nearby finds, D-29 and D30, in the Krishna Godavari basin block, persons with direct knowledge of the development said.
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 the flagging production from KG-D6 block.
People in the know 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. They, however, did not indicate the investment RIL-BP would make to produce gas from the fields by 2021-22. The government had in 2012 approved a $1.529 billion plan to produce 10.36 million standard cubic meters 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 $6.3 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 $2.89 per mmBtu for currently producing fields. People in the know said these four finds are now been clubbed together with D29 and D30 discoveries, which had been held up over conformity tests. RIL-BP combine does 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 12.9 mmscmd 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 today produce 6.4mmscmd. Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.
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