The Hindu Business Line : Reliance gets ready to test east-west gas pipeline

New Delhi, April 13 Reliance Gas Transportation Infrastructure Ltd (RGTIL), a Mukesh Ambani-led company, which is implementing the 1,440-km pipeline project from Kakinada (Andhra Pradesh) to Baruch (Gujarat) to transport gas from Reliance Industries Ltd’s (RIL) east-coast fields, expects to start testing (dry run) the pipeline shortly.

Sources told Business Line that “the east-west pipeline for carrying gas from the D6 block of Krishna-Godavari Basin will have the capacity to transport 120 million cubic metres a day (mcmd) of gas.

“The company plans to start testing the pipeline network in phases. We have received all the pending clearances including the environmental clearance for the pipeline to pass through a forest area in Maharashtra.”

Completion

Initially, the company was expecting to complete the project by March, but now the company is looking at end May.

RGTIL plans to connect the pipeline to GAIL (India) Ltd’s network near Uran. It would be a two-way pipeline. Subsequent to the east-west network, the RGTIL would be extending the pipeline to Chennai, Bangalore and Mangalore.

Nearly 1,500 Chinese workers are involved in the project, estimated to cost $3.5 billion. The Government in September 2007 had approved RIL’s price of $4.20 an mBtu for gas delivered at Kakinada. This excluded the marketing margins, transportation tariff and taxes.

Transportation charges

A new tariff plan for the transportation of gas indicates that consumers close to the KG basin will pay $0.17 an mBtu (million British thermal unit), while those in other parts of the State $0.45, and consumers in the rest of the country would pay $0.93.

D6 block development

RIL has completed almost 80 per cent of both offshore (platforms in deepwater) and onshore (terminal at Kakinada) tasks in the D6 block, sources said.

While most of the work offshore is over, the onshore work is on course for the company to meet the gas production target from D6. RIL is looking at the third quarter of the current fiscal to start production - a delay of about three months from its earlier target of a June-July 2008 start for gas production.

Within the D6 block, Reliance is developing Dhirubhai 1 and Dhirubhai 3 fields, with estimated 14.5 trillion cubic ft gas (TCF) reserves and MA fields with 140 million barrels of oil reserves. The company plans to produce 80 mcmd gas and 1.5 lakh barrels oil a day from it.

Peak output

The peak production from the field is expected to be 120 mcmd of gas.

Reliance holds 90 per cent interest in KG-DWN-98/3 or KG-D6 block while Niko holds the remaining 10 per cent.

On the exploration front, the company has planned to drill 22 wells out of which 17 have been drilled and five are in different stages of completion.