The Hindu Business Line : Gas production from KG fields expected by Feb-end: RIL

New Delhi, Jan. 12 Reliance Industries Ltd (RIL) expects to start the trial production of gas from its Krishna-Godavari (KG) basin fields by February-end.

Sources told Business Line that the company has communicated to the Petroleum Ministry about the status of gas production from the D6 block in the KG basin. The company is said to have informed the Ministry that based on the current progress of installation work, it expects to be in a position to start trial production of gas from the fields by late February.

“This is, however, subject to weather and marine conditions remaining conducive for completing the sub-sea installation and pre-commissioning works,” sources said.

RIL is also ready with the east-west pipeline network to ferry the D6 gas. Currently, the company is sourcing gas from other suppliers to test its network. According to industry sources, “Now that the company has in place the end-to-end infrastructure, all it requires is the speedy disposal of the case for gas to flow, in order to meet the requirements of the idle fertiliser and power projects.” The Government’s gas utilisation policy mandates the producer to sell gas to fertiliser and power sector on a priority basis.

RIL has already sourced 5 million standard cubic metre (mscm) of gas from GAIL (India) Ltd for testing sections of its 1,386-km east-west pipeline and is sourcing another 20 mscm from them at the prevailing market price.

The pipeline runs from Kakinada in Andhra Pradesh to Baruch in Gujarat. The actual requirement of gas for RIL to commission the pipeline network is far more (close to 100 mscm).

Meanwhile, the company had to put off delivery of crude oil from the same fields to February 15 due to equipment failure. Reliance has already started crude production from the predominantly gas-rich D6 block in September last year. But on December 9, 2008, production was shut down following pipe ruptures at the floating, production, storage and off-loading vessel (FPSO).

Reliance is the operator, with a 90 per cent stake in the D6 block. Niko Resources of Canada holds the remaining 10 per cent.

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‘Sharing gas from K-G would cost Reliance $1 b a year’

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