Reliance Industries (RIL) share price gained in the early trade on December 21 after the company announced the start of production from the ultra-deep-water gas field in block KG D6.
RIL and BP on December 18 announced the start of production from the R Cluster, ultra-deep-water gas field in block KG D6 off the east coast of India, RIL said in the release.
RIL and BP are developing three deepwater gas projects in block KG D6 – R Cluster, Satellites Cluster and MJ – which together are expected to meet ~ 15% of India’s gas demand by 2023.
These projects will utilise the existing hub infrastructure in KG D6 block.
RIL is the operator of KG-D6 with a 66.67% participating interest and bp holds a 33.33% participating interest.
“We are proud of our partnership with bp that combines our expertise in commissioning gas projects expeditiously, under some of the most challenging geographical and weather conditions," said Mukesh Ambani, Chairman and Managing Director of Reliance Industries.
The next project, the Satellites Cluster, is expected to come onstream in 2021 followed by the MJ project in 2022, company said.
Peak gas production from the three fields is expected to be around 30 mmscmd (1 bcf/d) by 2023 which is expected to be about 25% of India’s domestic production and will help reduce the country’s dependence on imported gas.
Morgan Stanley has kept overweight call on the stock with a target at Rs 2,247 per share.
According to research firm, the start of gas production from the KG basin is a positive and it has major implications for India's energy transition. It will support 48% rise in domestic gas supplies.
The new production should contribute 3 percent to earnings & cash flows by 2023, while company’s domestic E&P profits to rise & contribute 3 percent to earnings, reported CNBC-TV18.
At 09:27 hrs, Reliance Industries was quoting at Rs 2,013.05, up Rs 21.50, or 1.08 percent on the BSE.
The share touched its 52-week high Rs 2,368.80 and 52-week low Rs 867.45 on 16 September, 2020 and 23 March, 2020, respectively.
Currently, it is trading 15.02 percent below its 52-week high and 132.07 percent above its 52-week low.Disclaimer: Reliance Industries is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd. which publishes moneycontrol.com