RIL gears up for KG basin gas production

Reliance Industries (RIL), India’s largest private company by sales, is gearing up to start production from the largest gas discovery in the world at Krishna-Godavari basin, within a few months.

Two weeks ago, RIL chief Mukesh Ambani instructed his senior executives to get ready for production by October, almost two-three months ahead of the earlier planned schedule, as the refinery at Jamnagar, the East-West pipeline and facilities at KG basin are nearing completion, said sources.

RIL is developing the largest gas find in the world in KG basin, with estimated gas reserves of 11.5 trillion cubic feet (TCF). The Mukesh Ambani-controlled RIL plans to initially produce about 40 million standard cubic meters per day (mmscmd) and raise it to peak output of 80 mmscmd in within another five to six months of starting production.

While the global average lead time from discovery to production is nine years in deep water gas findings, KGD6 will be the fastest deep water development project in the world in six years time, claimed an RIL source.

RIL is engaged in a high profile legal battle with Anil Ambani-promoted Reliance Natural Resources (RNRL) over gas supplies, based on a demerger pact between the Ambani brothers.

The Bombay High Court is yet to pronounce its decision. Sources close to both camps said they were not sure whether the dispute could be settled within a few months.

"More than 90 per cent of the field development works and that of the pipeline have been completed and production could begin within a few months. Though Reliance is targeting to start production latest by December, the internal deadline has been set as October," said an RIL executive.

RIL has not set any particular month or date to start production, as it is a huge project, commented a spokesperson.

About 15-20 contractors with experience in oil and gas production is associated with the field development plan, including the Indian engineering major L&T, which is constructing a large onshore gas terminal at Kakinada. Oil and gas expert Bechtel is in charge of the engineering, procurement, installation, and commissioning of the project.

The project consists of 22 subsea wells in deep water up to 1,200 meters, with the potential to expand to 50 wells. Most of the wells are 35 to 40 kilometers offshore from the east coast of Puducherry.

The 1,400-km 48-inch pipeline from Kakinada to Bharuch in Gujarat is also nearing completion, except for a small stretch near Chakan in Maharashtra.

RIL executives working with the pipeline said land acquisition issues related to this stretch have been resolved and RIL has started test-firing the pipeline in various stages. "Now we are using gas from SAIL to test fire the line," said the executive.

A few days ago, RIL chose AGR Group ASA, a Norwegian oil technology and services provider, for a three-year advisory services in its gas and oil field in Krishna Godavari (KG) basin. The contract with AGR Group ASA is worth about Rs 178 crore and AGR Group will provide services for the D-1and D-2 gas fields and D-26 oil find in the KG basin.

"We already have a strong presence in Subsea operations in the Asia Pacific region and we will bring this expertise to support Reliance on this project”, said Johan Moller Warmedal, CEO of AGR Asia Pacific.