- Thursday, April 03, 2025
By: indiaweekly.biz Staff
Billionaire Mukesh Ambani’s Reliance Industries plans to start the delayed production from the second wave of discoveries in its eastern offshore KG-D6 block in November/December, the company said in an investor presentation.
Reliance is working on three projects in the Krishna Godavari basin KG-D6 block, where production from older fields stopped in February this year.
R-Series will the first of the three fields to go live. “All wells (have been) drilled, completed, tested and connected; sub-sea installation and testing works completed,” the firm said in an investor presentation post announcing second quarter earnings.
Balance works on control and riser platform are currently underway and “pre-commissioning and commissioning expected in 3Q FY21”, it said.
An official of the firm which has contracted the gas from the field said Reliance had previously indicated November as the month for start of production. Gas from R-Series field was previously expected in June but COVID-19 lockdown disrupted supply chain and the company could not complete the project in time.
Reliance and its partner BP are developing three sets of discoveries in KG-D6 block — R-Cluster, Satellites, and MJ by 2022. Peak output of around 28 million standard cubic metres per day is expected by FY24 when all three projects are up and running.
R-Cluster will have a peak output of 12 mmscmd while Satellites, which are supposed to begin output from the third quarter of 2021 calendar year, would produce a maximum of 7 mmscmd. MJ field will start production in third quarter of 2022 and will have a peak output of 12 mmscmd.
Reliance in November last year auctioned the first set of 5 mmscmd of gas from the newer discoveries in the KG-D6 block by asking bidders to quote a price (expressed as a percentage of the dated Brent crude oil rate), supply period and the volume of gas required.
Sources said Reliance had in November set a floor or minimum quote of 8.4 per cent of dated Brent price — which meant that bidders had to quote 8.4 per cent or a higher percentage for seeking gas supplies.
Considering current average Brent price of USD 40 per barrel, the gas will cost around USD 3.36 per million British thermal unit.
Dated Brent means the average of published Brent prices for three calendar months immediately preceding the relevant contract month in which gas supplies are made.
In the first round of auction in November 2019, Essar Steel, Adani Group and state-owned GAIL bought a majority of volumes on offer. The price at that time came to USD 5.1-5.16 per unit.
But international oil rates have slumped as demand evaporated due to outbreak of coronavirus and lockdowns imposed by countries around the globe.
Essar Steel had picked up 2.25 mmscmd in the country’s first transparent and dynamic forward auction that lasted about five-and-a-half-hours on November 15, 2019, sources said.
Gujarat State Petroleum Corp (GSPC) picked up 1.2 mmscmd while Adani Group and Mahanagar Gas Ltd bought 0.3 mmscmd, sources said, adding GAIL, acting on behalf of fertiliser companies, bought 0.3 mmscmd of gas.
Hindustan Petroleum Corp Ltd (HPCL) had bought 0.35 mmscmd and 0.10 mmscmd went to Gujarat State Fertilizers & Chemicals Ltd (GSFC)/Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC), sources said. In all, 15 customers across sectors such as steel, petrochemicals, city gas, glass and ceramic got gas in the tender, they added.
