RIL gas begins to flow from KG-D6 fields

New Delhi, Apr 2 (PTI) Mukesh Ambani-run Reliance
Industries made history when natural gas from its deep-sea
Krishna Godavari basin fields flowed to the surface Thursday,
a feat achieved in just seven years, something that will
transform India's energy situation.

Reliance Industries began gas production from Wednesday,
and the output is at 2.5 million cubic metres per day,
Indian Petroleum Secretary R S Pandey said, adding India will
save USD nine billion annually in the oil import bill because
of Reliance gas.

"Natural gas production from wells started at 1700 hrs
(IST) yesterday and it reached the onland receiving facility
at Gadimoga in Kakinada district of Andhra Pradesh this
morning," a source in the know of the development said.

Revenues from KG-D6 gas sales are expected to be USD 42
billion over the life of the field, and the Government's
profit share at a minimum USD 14 billion, Pandey said.

A company spokesperson confirmed start of gas production,
but did not give details. "We will be issuing a statement
shortly," he said.

Reliance took just seven years from the date of discovery
to begin gas production from the deep-sea KG-D6 block as
against the global practice of a minimum of nine years.

The gas would boost power supply from idle electricity
generators starved of fuel and produce cheaper urea for
agriculture.

"It is a landmark in the history of oil and gas
production. (The) world over, this has created a new benchmark
for deep-sea developers," said Director-General of Directorate
General of Hydrocarbons, V K Sibal.

The USD 8.835-billion (Rs 44,175 crore) project will
double domestic natural gas production when the field hits its
peak output of 80 million cubic metres per day in 2010.

It will wipe out the fuel deficit at urea-making
fertiliser plants and meet half of the 36 mmcmd gas shortfall
in power plants. Reliance will produce enough gas to meet
about a third of the UK demand.

"Whenever I have interacted with officials from global
oil majors like Chevron and BP, they have been highly
appreciative of the project management skills of Reliance,"
Sibal said.

The gas output will start at 10 mmcmd and rise by the
same volume every month to reach 40 mmcmd by July-end.
"Each well is capable of producing 5-6 mmcmd gas," Sibal
said. PTI