RIL, BP Plc To Invest $5 Billion In KG-D6 Basin, May Explore Mahanadi Basin As Well
Reliance Industries Ltd. and British partner BP Plc will invest $5 billion to bring to production three sets of natural gas fields in the Krishna-Godavari basin off the Bay of Bengal coast. The KG-D6 investment by RIL-BP will be spread over five years.
Bernard Looney, chief executive officer of BP Plc’s upstream operations, said that the partners are also discussing the development of natural gas found in Mahanadi basin, off Odisha's coast.
"Together we are spending up to $5 billion, or Rs 35,000 crore, in three natural gas development projects in the KG-D6 block and together we are expected to bring about one billion cubic feet per day of new domestic gas on stream by 2022," he said in New Delhi on Wednesday.
In June, RIL-BP announced an investment sanction for development of their deepest natural gas discovery in the KG-D6 block. The MJ, or D-55, gas find will be developed in sync with the previously approved 'R-Series' and the Satellites Cluster development to add 30-35 million standard cubic metres per day of natural gas production in phases.
The two partners also exploring ways of "economically" developing discoveries in the NEC-25 block in the Mahanadi basin and building pipelines for transportation of the gas, Looney said.
The three projects will develop a total of about 3 trillion cubic feet of discovered gas resources. R-Cluster will be first to come on stream, delivering gas in the second half of 2020-21 fiscal. The second set is called the Satellite Cluster. MJ is the third of these fields.
Reliance, which is the operator of KG-D6 with 60 percent stake, has so far made 19 gas discoveries in the Bay of Bengal block. Of these, Dhirubhai-1 and 3 (D1 & D3) — the largest among the lot— were brought into production from April 2009 and MA, the only oilfield in the block, was put to production in September 2008.
The output from D-1 and D-3 has fallen sharply from 54 million standard cubic metres per day in March 2010 to 1.3 million standard cubic metres per day in the January-March quarter. MA field ceased to produce last year.
BP holds 30 percent stake in the KG-D6 block while the remaining 10 percent is with Niko Resources Plc of Canada.
Besides MJ, four deepsea satellite gas discoveries —D-2, 6, 19 and 22 — are planned to be developed together with D29 and D30 finds on the block. These six fields are called Satellite development. The third set is the D-34 or R-Series find.
According to Looney, India is expected to overtake China as the largest growth market for energy in the mid-2020s and its primary energy demand will increase two-and-a-half times until 2040.
"India has a natural gas base with a potential to meet 50 percent of anticipated demand for gas through to 2050. Natural gas burns at half of the emission of coal for power generation and offers significant benefits for air quality. In renewables, there are large untapped solar and wind resources with a potential to be utilised at a cost which is increasingly competitive with hydrocarbons," he said.