RIL awards R-Series gas field contract in KG-D6 to McDermott

R-Series is one of three sets of discoveries in eastern offshore KG-D6 block that RIL and its partner BP plc of UK are working to bring to production by 2021-22 to reverse declining trend in output

Reliance Industries has awarded a major contract for bringing to production the R-Series gas field in the flagging KG-D6 block to US engineering and construction company McDermott.

R-Series is one of the three sets of discoveries in the eastern offshore KG-D6 block that RIL and its partner BP plc of UK are working to bring to production by 2021-22 to reverse the declining trend in output.

McDermott on its website confirmed award of the contract but did not give value of the deal.

The company said it will provide "engineering, procurement, installation and pre-commissioning of subsea flowlines, vent lines, and a pipeline-end manifold for connection with six subsea wells in the R-cluster field at a water depth of up to 6,890 feet (2,100 meters)."

This is the first of three planned projects in KG-D6 that RIL-BP had announced in June, involving a cumulative investment of Rs 40,000 crore and producing from about 3 trillion cubic feet of discovered gas resources.

The R-series (D34) project is a dry gas development in water-depths of more than 2,000 metres, about 70 kilometres offshore.

It is to be developed by linking six producing wells with existing producing facilities at Dhirubhai-1 and 3 (D1&D3) gas fields in the block.

"The project is expected to produce up to 12 million cubic metres of gas a day, coming on stream in 2020," RIL-BP had said in June.

McDermott said in addition to the R-Cluster of six subsea wells, RIL can give it the job of five to seven more subsea wells at the Satellite-cluster fields in the KG-D6 block.

"The optional scope also consists of two additional subsea structures and flowlines at a water depth between 4,593 feet (1,400 meters) and 5,905 feet (1,800 meters)," it said.

McDermott said it plans to leverage its significant experience and presence within India including its Engineering Center of Excellence office in Chennai providing engineering and project management oversight for the project.

RIL-BP had in August 2013 won approval to invest up to $3.18 billion to produce gas for 13 years from D-34 (R- Series) discovery in the KG-DWN-98/3 or KG-D6 block.

The planned output from D-34, which is estimated to hold an in-place reserve of 2.2 Trillion cubic feet, more than double of the combined current production from Dhirubhai-1 and 3 (D1&D3) gas field and MA field in the KG-D6 block.

RIL had originally put the recoverable reserves in D-34 at 1.413 Tcf that could produce a peak output of 14.9 mmscmd. However, the Directorate General of Hydrocarbons (DGH) trimmed the recoverable reserves to 1.191 Tcf and peak output to 12.9 mmscmd.

The Dhirubhai-34 or D-34 gas discovery in the southern part of KG-D6 block in Krishna Godavari basin was notified in May 2007. The find was declared commercially viable by MC in November 2011.

RIL has so far made 19 gas discoveries and 1 oil find in the KG-D6 block. Of these, D1&D3 gas fields were brought to production in April 2009 while MA oilfield began pumping oil in September 2008.