Mumbai: Reliance Industries (RIL) and BP Plc, partners in a gas block in the Krishna-Godavari basin, have started approaching prospective customers to sell gas that will start flowing from their R-series field in 2020, said two people aware of the matter.
The firms will sell gas through India Gas Solutions (IGS), an equal joint venture they formed in 2011 for the sourcing and marketing of gas, the two people said on condition of anonymity.
A BP India spokesperson confirmed the development in an email, saying “IGS is already reaching out to the market and will be evaluating interest in purchase of R-series gas in first half of 2018."
The spokesperson added that new gas production from the D6 field in the KG block will flow from 2020 and is expected to bring a total 30-35 million cubic metres of gas a day, phased over 2020-22.
So far, only the D6 field in KG block is producing gas. The R-Series and other satellite fields are yet to be developed.
The six satellite fields include D2, 6, 19, 22, 29 and 30, in the KG block. While the development of the six satellite fields would be taken up together, D-34 or R-Series and D-55 (MJ) would be developed separately.
Last June, RIL and BP announced an investment of Rs40,000 crore in their satellite fields, R-Series and MJ gas discoveries, to reverse flagging production from the KG block. This investment will boost production as much as fivefold over the next three to five years.
“With this development, RIL and BP are confident to provide gas supplies on a sustainable basis in the long term," added BP India.
A spokesperson from RIL said in an email, “IGS is constantly evaluating options to supply competitively priced gas to Indian gas customers by leveraging strengths of both BP and RIL. We are not in a position to share any details as of now."
Through IGS, the companies are reaching out to the market, assuring customers that these resources will be highly competitive in replacing liquid fuels, especially imported liquefied natural gas (LNG), BP said.
IGS is also pursuing options to import and market LNG into India and looking to pick up stake or administer capacity in LNG regasification facilities and gas transportation pipelines.
RIL and BP are partners in the KG block, which currently produces around 7-8 million standard cubic metres of gas per day. While RIL holds a 60% stake in the gas block, BP owns 30%. Canada-based Niko Resources Ltd owns the rest.
The D6 field began gas production in April 2009 and was to hit a peak output of 69.43 million standard cubic metres per day in March 2010. However, water and sand ingress forced the closure of some wells, leading to a drop in production.
BP and RIL began their partnership in 2011, when BP picked up a 30% stake in RIL’s 21 oil and gas blocks for $7.2 billion.
Since 2012, however, RIL and BP have been pruning their portfolio, relinquishing the unviable ones.