Reliance Industries and its partner BP plc of the UK plan to use a floating production system at high-sea in the Bay of Bengal to bring to production the deepest gas discovery in the flagging KG-D6 block.
The MJ-1 gas find is located about 2,000 meters directly below the currently producing Dhirubhai-1 and 3 (D1 and D3) fields in the eastern offshore KG-D6 block and is estimated to hold a minimum of 0.988 Trillion cubic feet (Tcf) of contingent resource.
An executive in the joint venture said floating production storage and offloading (FPSO) will be used to bring the gas to the surface, treat it and pump it to the pipeline system that will take it to the shore.
In May 2013, RIL, BP and Niko Resources of Canada had struck a 155-metres thick gas condensate column in the exploration well KGD6-MJ1, which was later named as D55 or MJ-1 discovery.
MJ-1 is one of the three clusters that the partners are focusing on reviving the flagging output at KG-D6.
"The commerciality of the discovery was approved in December last year and we have one year time from that date to submit an investment plan called the field development plan (FDP). If need be, the deadline can be extended by six months. So we have time till mid-2018 to firm up investment," he said.
Besides MJ-1, 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. The third set is the D-34 or R-Series find.
"All the three (sets of finds) will produce 30-35 million standard cubic meters per day of gas in 4-5 years," he said.
RIL and BP had in mid-June this year announced investing Rs 40,000 crore in the three sets of finds to reverse the flagging production in KG-D6 block.
The government had in 2012 approved a $1.529 billion plan to produce 10.36 mmscmd of gas from four satellite fields of block KG-DWN-98/3 (KG-D6) by 2016-17.
The four fields have 617 billion cubic feet of reserves and can produce gas for eight years.
However, the companies did not begin the investment citing uncertainty over gas pricing.
Now that the government has allowed a higher gas price of $5.56 per million British thermal unit for yet-to-be- developed gas finds in difficult areas like the deep sea, RIL and BP have decided to take up their development.
This rate compares with $2.48 per mmBtu for currently producing fields.
The executive said these four finds have now been clubbed together with D29 and D30 discoveries, which had been held up over conformity tests.
A revised integrated FDP the four satellite and the two other finds would be submitted by December.
They, however, did not give investment numbers, saying a slump in global energy prices and services market will only see a lesser amount of money being spent.
RIL-BP combine does not plan to alter the $3.18 billion investment plan for D-34 or R-Series gas field in the same block, which was approved in August 2013.
About 12.9 mmscmd of gas for 13 years can be produced from D-34 discovery, which is estimated to hold recoverable reserves of 1.4 trillion cubic feet.
RIL has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 -- the largest among the lot -- were brought into production from April 2009, but output has fallen sharply from 54 mmcmd in March 2010 to 3-4 mmcmd.
MA is the only other field that was put to production. Together, the three fields today produce 6.4 mmscmd.
Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.
RIL is the operator of the block with 60 per cent interest while BP has 30 per cent stake. Niko has the remaining 10 per cent share.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)