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Reliance AGM 2022 | Reliance to start natural gas production from MJ field by year-end

Mukesh Ambani said that the KG-D6 block will constitute about 30 percent of India's total natural gas need when the MJ field starts production. This will help meet India's growing demand indigenously, leading to import savings of nearly $9 billion per year

August 29, 2022 / 03:15 PM IST
Oil

Oil

Reliance Industries Ltd (RIL) will start production of natural gas from MJ field - the third and the last set of discoveries it is developing in the eastern offshore KG-D6 block - by the end this year to raise the overall output by about two-thirds.

Mukesh Ambani, the RIL chairman and managing director, in his speech at the company's annual general meeting on Monday, said that the production from the KG-D6 block will constitute about 30 percent of India's total natural gas need when the MJ field starts production. This will help meet India's growing demand indigenously, leading to import savings of nearly $9 billion a year.

"With 19 million standard cubic metres per day of production in ultra-deepwater fields, KG-D6 is contributing 20 percent of India's domestic gas production," Ambani said.

RIL in May informed that it had completed its first offshore installation campaign and a second one would start in November.

RIL-BP is developing three deep-water gas discoveries in the KG-D6 block — R Cluster, Satellite Cluster and MJ — which are expected to cumulatively produce around 30 million standard cubic metres of natural gas every day by 2023, meeting up to 15 percent of India's gas demand.

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RIL and its partner BP plc of the UK plan to use a floating production system at high-sea in the Bay of Bengal to bring to production the deepest gas discovery in the KG-D6 block.

RIL had in May said it expects prices of natural gas in India to rise again in October as its gas exploration business reaps the rewards of a global surge in energy prices that have pushed the rates to a record high.

The conglomerate expects the price cap for its KG-D6 gas sales to rise over the current $9.92 per million British thermal units.

The government sets gas prices every six months based on international rates. The price of gas from old or regulated fields was more than doubled to a record $6.1 per mmBtu from April 1 and that for difficult fields like those lying in deepsea to $9.92. per mmBtu. Rates are due for a revision in October.

The MJ-1 gas find is located about 2,000 metres directly below the Dhirubhai-1 and 3 (D1 and D3) fields - the first and the largest fields in KG-D6 block. MJ-1 is estimated to hold a minimum of 0.988 trillion cubic feet (tcf) of contingent resources.

The field also has oil deposits which would be produced using a floating system, called FPSO.

R-Cluster started production in December 2020 and the Satellite Cluster came onstream in April. While R-Cluster is expected to reach plateau gas production of about 12.9 mmscmd in 2021, Satellite Cluster will have a peak output of 6 mmscmd. The MJ field will have a peak output of 12 mmscmd.

RIL said the average production in April-June this year was 16.6 mmscmd from KG-D6. The firm had in three rounds of bidding sold 18 mmscmd of gas from the fields in April-June.

The oil-to-telecom conglomerate has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 — 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. While the MA field stopped producing in 2019, the output from D-1 and D-3 ceased in February 2020.

Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.
Moneycontrol News
first published: Aug 29, 2022 03:15 pm
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