Reliance Industries & BP dig for new hope in another project at its flailing gas basin

• The partners will invest as much as Rs 350 billion in three new projects on their gas block
  
• The projects are expected to develop a total of about 3 trillion cubic feet (tcf) of gas resources
  
• The latest project is expected to begin production in mid-2022
  

Billionaire Mukesh Ambani’s Reliance Industries and its partner British Petroleum (BP) are developing yet project to drill more gas at its KGD6 block in the east coast of India.

In total, the partners will invest as much as ₹35,000 crore or ₹350 billion in three new projects on the gas field whose production has drastically dropped in the last nine years.

“Together the three projects are expected to develop a total of about 3 trillion cubic feet (tcf) of discovered gas resources. These projects together, when fully developed, will bring about 1 billion cubic feet a day of new domestic gas onstream, phased over 2020-2022,” Reliance Industries claimed in a statement.

A tough new challenge

The new project named D55, the company statement says, is a gas condensate field and is the third field under development at the block. It is also one of the deepest blocks which means a deep-water pipeline had to be installed to bring out the gas trapped under water.

“We are excited about bringing this gas onshore from our third project on the East Coast of India. Bringing these three discoveries to production, as promised in 2017, by leveraging the existing infrastructure has been the primary objective of the Reliance - BP joint venture,” said Mukesh Ambani, chairman and managing director of RIL.

RIL and BP who joined hands in 2011 decided to take up the challenge of extracting trapped gas which is expected to be around 700-1100 meters deep under water. The depth of the well itself is 4,200 meters and building infrastructure in a high temperature and high pressure environment is bereft with unforeseen events.

Reviving KGD6

Yet, the partners are taking up the challenge as its last hope to change the fortunes of the one-treasured gas block, which has failed to meet the expectations. At its peak, the block produced over 54 mmscmd of gas which dropped to a menial 1.3 mmscmd in the third quarter of 2018-19. A large section of power producers and fertilizer plants who pinned their hopes of this gas block, had to turn to expensive options turning them insolvent.


The project is expected to begin production in mid-2022 claims and is the latest of the three projects under development as a part of their overall plan to revive KGD6. “The first of the three KG D6 projects under development, the R-Series project, is in execution phase. All six wells have been drilled. First gas from this project is on-schedule and expected by mid-2020,” the company said in a statement.