British energy giant BP plc and its partner Reliance Industries will invest $5 billion in bringing to production three sets of natural gas fields in the Krishna Godavari basin block in the Bay of Bengal by 2022. BP's Chief Executive (Upstream) Bernard Looney said the partners are also discussing the development of natural gas found in Mahanadi basin, off the Odisha coast.
"Together we are spending up to $5 billion or Rs 35,000 crore in three gas development projects in the KG-D6 block and together we are expected to bring about one billion cubic feet per day of new domestic gas on stream by 2022," he said here.
The three projects will help reverse the falling gas output from what was once the biggest gas-producing block in the country.
Last month, the two partners had announced investment sanction for development of their deepest natural gas discovery in the KG-D6 block. The MJ, or D-55, gas find will be developed in sync with the previously approved 'R-Series' and the Satellites Cluster development to add 30-35 million standard cubic metres per day of natural gas production in phases.
The two partners also exploring ways of "economically" developing discoveries in the NEC-25 block in the Mahanadi basin and building pipelines for transportation of the gas, Looney said.
The three projects will develop a total of about 3 Tcf (trillion cubic feet) of discovered gas resources. R-Cluster will be first to come on stream, delivering gas in the second half of 2020-21 fiscal. The second set is called the Satellite Cluster. MJ is the third of these fields.
Reliance, which is the operator of KG-D6 with 60 per cent stake, has so far made 19 gas discoveries in the Bay of Bengal block. Of these, Dhirubhai-1 and 3 (D1 & D3) -- the largest among the lot -- were brought into production from April 2009 and MA, the only oilfield in the block, was put to production in September 2008.
The output from D-1 and D-3 has fallen sharply from 54 million standard cubic metres per day (mmscmd) in March 2010 to 1.3 mmscmd in the January-March quarter. MA field ceased to produce last year.
BP holds 30 per cent stake in the block while the remaining 10 per cent is with Niko Resources of Canada.
Besides MJ, four deepsea satellite gas discoveries -- D-2, 6, 19 and 22 -- are planned to be developed together with D29 and D30 finds on the block. These six fields are called Satellite development.
The third set is the D-34 or R-Series find.
According to Looney, India is expected to overtake China as the largest growth market for energy in the mid-2020s and its primary energy demand will increase two-and-a-half times until 2040.
"India has a natural gas base with a potential to meet 50 per cent of anticipated demand for gas through to 2050. Natural gas burns at half of the emission of coal for power generation and offers significant benefits for air quality. In renewables, there are large untapped solar and wind resources with a potential to be utilised at a cost which is increasingly competitive with hydrocarbons," he said.
Disclaimer: “Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.”
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