Reliance Industries plans to start the delayed production from the second wave of discoveries in its eastern offshore KG-D6 block in November. They are working on three projects in the Krishna Godavari basin KG-D6 block, where production from older fields stopped in February this year. R-Series will the first of the three fields to go live.
Gas from R-Series field was previously expected in June but due to Coronavirus lockdown disrupted supply chain and the project could not completed in time. Reliance and its partner BP are developing three sets of discoveries in KG-D6 block R-Cluster, Satellites and MJ by 2022. Peak output of around 28 million standard cubic metres per day is expected by FY24 when all three projects are up and running.
R-Cluster will have a peak output of 12 mmscmd while Satellites, which are supposed to begin output from the third quarter of 2021 calendar year, would produce a maximum of 7 mmscmd. MJ field will start production in third quarter of 2022 and will have a peak output of 12 mmscmd.
Reliance in November last year auctioned the first set of 5 mmscmd of gas from the newer discoveries in the KG-D6 block by asking bidders to quote a price, supply period and the volume of gas required. Reliance had in November set a floor or minimum quote of 8.4% of dated Brent price which meant that bidders had to quote 8.4% or a higher percentage for seeking gas supplies.
Considering current average Brent price of USD 40 per barrel, the gas will cost around USD 3.36 per million British thermal unit. Dated Brent means the average of published Brent prices for three calendar months immediately preceding the relevant contract month in which gas supplies are made.
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 from April 2009 and MA, the only oilfield in the block was put to production in September 2008. While the MA field stopped producing last year, the output from D-1 and D-3 ceased in February.
Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production. Reliance is the operator of the block with 66.6% interest while BP holds the remaining stake.
