Reliance gas production put off

Decision is because of operational problems

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RIL from KG basin gas field expected to produce 80 mcm

The company holds a 90 per cent stake in the D6 block

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Rajahmundry: Mukesh Ambani’s Reliance Industries which struck huge gas from its D6 block in the Krishna-Godavari basin in the Bay of Bengal and set to go for production from July has postponed its plans to the year-end.

After entering into an MoU with GAIL (India) for distribution and transportation it has finalized to start production in July and proposed to invest $ 5.2 billion in its facility.

As per Reliance Industries sources, the RIL is not in a hurry to start production immediately in KG Basin as it has encountered some operational problems onshore. The RIL is also having some tie-up problems with Andhra Pradesh, Gujarat & other states in distribution of gas.

The RIL from its KG basin gas field is expected to produce 80 million cubic meters (2.8 billion cubic feet) of gas per day, out of which it will take around 60 million cubic meters to its Gujarat and rest of 20 million cubic meters will be given to its customers in Andhra Pradesh.

Reliance Industries believes that there are reserves of more than 14.5 trillion cubic feet in the D6 block. The company currently holds a 90 per cent stake in the deepwater D6 block. The remaining 10 per cent is owned by Canada-based company Niko Resources.

Distribution
As per Reliance sources, at present the ONGC, Cain Energy and others have a tie-up with GAIL (India) for distribution of gas which they are producing from KG Basin. The distributor’s network in Andhra Pradesh includes NFCL (Kakinada) 2 million cubic meters per day, Lanco, Vijayawada 1.5 mcm, GVK 1.00 mcm, REL, APGPCL, Spectrum, Regency Ceramics, Dloex, Rolex paper mills, Andhra Sugars and so on. “All put together there will be around 38 to 40 customers for us.

They need a maximum of 17 million cubic meters per day. But, now they are getting only 7 million cubic meters a day”-said GAIL sources. The Reliance Industries currently produces a wide range of products, ranging from polymers to petroleum to garments.

The Reliance is also planning to have a tie-up with Bhagyanagar Gas Company Limited for opening CNG outlets in Hyderabad, Vijayawada and Visakhapatnam in first phase and Rajahmundry, Tirupati, Kurnool, Nellore and Karimnagar in second phase.