Centre clears RIL's $1.53-billion investment plan

Investment for developing four satellite gas findings would add another 10 mscmd in the next 3 years

On a day when Reliance Industries Ltd (RIL) posted a double-digit growth in quarterly profit, giving a bigger boost to the company, Petroleum Minister M Veerappa Moily said the ministry had cleared RIL’s investments worth $1.53 billion in KG-D6 block.

The minister added  the investment for developing four satellite gas findings would add another 10 million standard cubic metres a day (mscmd) in the next three years. He added with a rise in domestic natural gas prices, the output of major companies would increase categorically by 2016-17.

According to petroleum ministry’s estimates, the domestic natural gas production is set to increase 66.7 per cent from 105 mscmd in 2013-14 to 175 mscmd in 2016-17. Out of this, state-run ONGC Ltd has projected a production of about 29 mscmd in 2016-17 in its block KG-DWN 98/2.

Moily added that the country has a huge prospect of natural gas in Manipur, which can go up to a reserve of 7 trillion cubic feet.

The  ministry is in talks with the state government and the Planning Commission to ensure a few bridges are constructed to enable the rigs to reach Manipur.

The Centre is also betting big on GSPC fields and Jubilant Energy field in Tripura. “Increased production of domestic gas and availability of imported RLNG is bound to result in reduction of gas price,” Moily added. Based on the Rangarajan formulae of pricing cleared by the Cabinet, the pricing of domestic natural gas is likely to be above $8 per million  British thermal unit.

According to the Directorate General of Hydrocarbons , the output from KG-D6 in 2016-17 is expected to be in the range of 19.8 mscmd, while it is around 14.4 mscmd now.

On allegations that RIL is not cooperating with the Comptroller and Auditor General’s audit, the minister indicated  everybody was co-operating.