Reliance Industries wins government nod for additional investment to raise KG-D6 gas output

New Delhi: Reliance Industries Ltd has got government approval for making additional investments in developing gas reserves in its KG-D6 block in the Bay of Bengal that can add 4 to 5 million standard cubic meters per day to the production, a company official said.

Reliance and its partner bp Plc currently produce around 30 mmscmd or about 30 per cent of India's gas production, from the KG-D6 block.

At an investors' call announcing the fourth quarter earnings, Sanjay Roy, senior vice-president for exploration and production at Reliance Industries Ltd, said the development plan for incremental production has been approved by the government.

"One good aspect of this quarter gone by was that we had an incremental development plan approved by the government, which has the potential to deliver incremental production of 4 to 5 million standard cubic meters (per day) in the coming few years, which would augment the production that we have," he said.

He, however, did not give details of the investment approved.

Reliance-bp produces some 30 mmscmd of gas from three sets of discoveries in the deep-sea KG-DWN-98/3 or KG-D6 block, the last - MJ oil and gas field - being put into production in May 2023. All three sets of discoveries, with MJ being the deepest, were made more than a decade back and have been progressively put into production.

Prior to that, they had brought the R-Cluster field to production in December 2020 and the Satellite Cluster in April 2021.

KG-D6 has helped domestic production of natural gas, which is used to generate electricity, make fertilizer or turned into CNG for running automobiles or piped to kitchens for cooking, touching a multi-year high of 99 mmscmd.

Total gas demand in the country is around 188 mmscmd, with the difference being met through imports.

"When we look at the (domestic) production, we can see clearly there's been a sharp increase in production since FY21. And although the overall domestic production, besides KG-D6, has been flat, KG-D6 production is almost 90 per cent of the incremental domestic gas production," Roy said.

Reliance is the operator of the KG-D6 block with a 66.67 per cent stake and bp holds the remaining 33.33 per cent.

Reliance 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 in April 2009, and MA, the only oilfield in the block, was put into production in September 2008.

While the MA field stopped producing in September 2018, output from D-1 and D-3 ceased in February 2020.

Since then, Reliance-bp invested $5 billion in bringing to production three deepwater gas projects in block KG-D6 -- R-Cluster, Satellites Cluster, and MJ.

The MJ field is located about 2,000 metres directly below the Dhirubhai-1 and 3 (D1 and D3) fields. It is a high-pressure and high-temperature (HPHT), gas and condensate field. Besides gas, it is to produce 25,000 barrels of condensate per day at peak.