India can save $8.3 bn annually on Rel KG-D6 gas

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New Delhi: Reliance Industries' eastern offshore KG-D6 gas fields at peak production will help the nation save USD 8.3 billion annually or 0.7 per cent of the GDP, investment banker Morgan Stanley said.

"Assuming 80 million cubic meters per day of gas supplies for a year as a whole, India could save USD 8.3 billion annually," Moran Stanley said in a research note on RIL for its clients.

RIL, which is currently producing 31-32 mmcmd, is likely to touch 80 mmcmd in next six months. This peak output could replace close to 26 million tons of crude oil, which is as much as ONGC produces domestically, or about 17 per cent of current demand in India, the report said.

"We estimate 20 mmcmd of gas would go to the fertilizer industry and most of the rest to the power industry. This implies that as much as 13 million tons or 50 per cent of the country's fertilizer production, and about 12,500 MW of power, or 8-9 per cent of overall power produced in the country, can run on RIL's gas."

RIL stated gas production from KG-D6 fields on April 2 and has signed contracts with 15 fertilizer plants to sell close to 15 mmcmd gas. Additionally, it has contracted over 25 mmcmd to 19 power plants and 3.3 mmcmd to steel plants.