The Hindu Business Line : KG basin gas to cost 1/5th of crude oil: Mukesh Ambani

Adding rigs
Two deep-water fields are poised to come on stream with a combined capacity of about 5.5 lakh barrels of oil equivalent a day.
Deep-water rig fleet to be expanded with six additional rigs.

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Mumbai, June 12 The price fixed for Reliance Industries’ KG Basin gas will be equivalent to less than one fifth of the current market price of crude, Mr Mukesh Ambani, RIL Chairman, told the company’s shareholders here today.

“Gas sales, which will commence this year, will be at a wellhead price equivalent to $25.2 a barrel of crude oil as compared to the current market price of $135 a barrel of crude oil,” he said, at the company’s AGM.

The Government had fixed the sale price of gas from RIL’s KG basin at $4.20 per MMBTU, which is equivalent to $25.2 a barrel of crude. The final consumer price will include the transportation and other costs.

Mr Ambani said two major deep water fields are poised to come on stream with a combined capacity of about 5.5 lakh barrels of oil equivalent a day.

“Our global gross reserve and contingent resource base has grown to 5 billion barrels of oil equivalent. We are expanding our deep-water rig fleet with six additional rigs,” Mr Ambani said.

“As part of the organised retail initiative, Reliance Retail will be creating several rural business hubs. At one level, these will be centres for aggregation of farm produce. At another level, they will engage with supply of quality farm inputs and provision of products and services to rural consumers,” Mr Ambani said.

He also said alternative energy offered new potential for growth. It is a natural extension of the company’s energy portfolio. However, he did not elaborate on the plans.

It may be noted that the company has submitted a proposal the Union Government for setting up two manufacturing facilities under the Government’s scheme to promote semiconductor technology. Solar power is heavily dependent on semiconductors.