RIL-BP sanction satellite gas field development in KG D6
The RIL-BP combine would develop a cluster of four gas discoveries in the Krishna Godavari basin block by 2020-22
New Delhi: Reliance Industries and its partner BP plc on Thursday announced sanctioning of a second project to develop satellite gas fields in the KG D6 block to help reverse the flagging output at the Bay of Bengal block.
The RIL-BP combine would develop a cluster of four gas discoveries in the Krishna Godavari basin block by 2020-22, the two firms said in a joint statement. Previously, the two had made a final investment decision (FID) to develop the R-Series gas field by 2019-20.
“The ‘Satellite cluster’ is the second of three projects in the Block KG D6 integrated development. The first of the projects, development of the ‘R-Series’ deep-water gas fields, was sanctioned in June 2017,” the statement said. “Together the three projects will develop a total of about 3 trillion cubic feet of discovered gas resources with a total investment of Rs40,000 crore. They are expected to bring a total 30-35 million cubic metres a day (mmscmd) new domestic gas production on-stream, phased over 2020-2022,” it added.
RIL is the operator of block KG-DWN-98/3 or KG D6 with 60% stake while UK’s BP Plc has 30% interest, and Niko Resources of Canada the remaining 10%. The partners have been focusing on developing R-Series, satellite cluster and MJ (D55) deep discovery to revive the flagging output at the block. While the companies did not give investment breakup, they had in August 2013 secured regulatory nod for investing $3.18 billion in developing D-34 or R-Series gas field in the block.
In February this year, they got nod for investing around $4 billion in the other two sets of discoveries. RIL has so far made 19 gas discoveries in the KG D6 block. Of these, D-1 and D-3—the largest of the lot—were brought into production from April 2009, but output has fallen sharply from 54 mmscmd in March 2010. They together with MA oil and gas field, the only field in production, currently produce 4.9 mmscmd.
Discoveries other than these three and the ones being developed now have either been surrendered or taken away by the government for not meeting timelines for beginning production. RIL-BP announced “the sanctioning of the ‘Satellite cluster’ project in Block KG D6” but did not say anything of the MJ development.
“The companies are moving forward to develop the Block’s discovered deep-water gas fields in an integrated series of projects, bringing new gas production for India,” the statement said. Mukesh Ambani, chairman and managing director of RIL, said: “In consonance with our announcements last year to raise domestic gas production, we are delighted to announce the on-schedule progress of the Satellite cluster in the east coast of India. This development supports the country’s imminent need of increasing domestic gas supply and is a firm step towards making India a gas-based economy.”
Speaking in London, Bob Dudley, BP Group chief executive, said the move further demonstrated BP’s commitment to India. “Through our partnership, Reliance and BP are able to develop these discovered gas resources efficiently and economically, working closely with the Government of India. These new developments will produce much-needed energy for India’s thriving economy.”
The Satellites cluster is a dry gas development and comprises four discoveries with five well subsea development in 1,700 meters water depth, up to 15 kilometers east and southeast of the producing D1D3 fields in KG D6. “The first of the KG D6 projects to be sanctioned, the R-series project, is already in execution phase with all major contracts awarded. The Satellites cluster project will draw on execution synergies with the R-series project being developed concurrently,” the statement said.
India today consumes over 5 billion cubic feet a day of natural gas and aspires to double gas consumption by 2022. “Gas production from the integrated development is expected to help reduce India’s import dependence and amount to over 10% of the country’s projected gas demand in 2022; benefiting India and domestic consumers at large,” it added.