RIL to hit peak gas output from KG basin in 2011

New Delhi, Dec 29 | Updated: Dec 30 2006, 05:30am hrs
Reliance Industries will reach peak output of 80 million standard cubic meters per day (mmscmd) of natural gas from its D6 block in Krishna Godavari basin in 2011, three years after beginning production from the prolific block off the east coast.

Reliance will start producing natural gas from blockKG-DWN-98/3, also known as KG-D6, in June 2008 with initial output of 27.6 mmscmd, a petroleum ministrys note to the Prime Ministers energy coordination committee said.

The 27.6 mmscmd production rate would be for one year, after which the output will reach 40 mscmd. This production level will last for two years and plateau rate of 80 mmscmd is scheduled to be achieved by July 1, 2011. The plateau output would last six years, the note said. Reliance will invest $8.836 billion in two phases for developing Dhirubhai-1 and 3 gas finds, the first two of the 13 gas discoveries made by the company in block D6. Phase-I investment would be $5.197 billion, while the remaining $3.639 billion would be invested in second phase, beginning 2008-end, the note said.Reliance holds 90 % interest in Block D6, where it estimates reserves in excess of 50 trillion cubic feet.

Niko Resources of Canada has the remaining 10 % the revised development plan envisaging $8.836 billion investment was approved on December 12, the note said, adding, there was no delay in gas production from D6. Originally, Reliance had proposed to invest 2.47-billion dollars in developing Dhirubhai-1 and 3 gas finds. But in October, this was revised due to rise in rig hire charges.

The company would drill 22 wells in Phase-1 and 28 wells in Phase-II. In the original development plan, Reliance had proposed to drill 34 wells. The resource base of Dhirubhai 1 and 3 gas finds had been raised since filing of original field development plan. Against the 5.3 trillion cubic feet(tcf) proven plus probable reserves, RIL now estimated 11.3 Tcf reserves in the two discoveries.

The ultimate reserve in the two fields stands at 21 tcf. Life of the field has been estimated at 18 years. After the first 7-8 years, production will decline unless more wells are drilled and new reserves added.