Reliance pushes back KG-D6 production to Sep/Oct

New Delhi: Reliance Industries has pushed back the start of production from the second wave of discoveries in its eastern offshore KG-D6 block to September/October after the COVID-19 lockdown imposed unprecedented constraints in execution of the deepwater project.

The company, along with its partner BP Plc of the UK, was initially targeting the start of production from the R-Series field in the Krishna Godavari block in May but pushed it back to June-end due to the lockdown.

The lockdown has further pushed the start of production to mid of 2020-21 fiscal, Reliance said in its latest annual report.

Fiscal year runs from April to March and mid of the fiscal should be September or October.

In its annual report, Reliance said the key focus for 2019-20 was to monetise the about 3 trillion cubic feet equivalent of discovered resources in KG-D6 deepwater.

"Concurrent development of three deep/ultra-deepwater projects in block KG-D6 namely, R-Cluster, Satellite Cluster and MJ fields, is being pursued by leveraging the existing world class hub infrastructure.

"All contracts have been awarded and projects are in different stages of maturity with commissioning of the first of the three projects i.e. R Cluster, expected this year," it said.

Combined production from these three fields is expected to be 30 million standard cubic metres per day (mmscmd) by FY2024. The output is equal to a third of India's current natural gas production.

"Up until March 2020, all projects have been ahead of schedule. However, the outbreak of the COVID-19 pandemic and consequent lockdowns have presented unprecedented constraints in the execution of these deepwater projects.

"While safety of people and assets remains our top priority, we are making all efforts to progress these projects and expect to commission the R-Cluster Field in mid FY 2021," the company said.

The company's D1 and D3 fields in the KG-D6 block ceased to produce in February this year after being in production for a decade.

R-Cluster will have a peak output of 12.9 mmscmd while Satellites, which are supposed to begin output from mid-2021, would produce a maximum of 7 mmscmd. MJ field will start production in the second half of 2022 and will have a peak output of 12 mmscmd.

"The R-Cluster fields which will come onstream first, will have a peak production of 12.9 mmscmd, about 10 per cent of India's current gas production. The combined production from the three fields will ramp up to 30 mmscmd in 2023 when all the fields are onstream," it said.

Reliance said with a significant gas resource base, it is poised to be a premier contributor to India's gas-based economy.

"Within three years, we are aiming to achieve peak production of gas that will be equivalent to nearly 30 per cent of India's indigenous production. This will translate into substantial multiplier effects for the economy and lead to energy import savings to the tune of nearly USD 25 billion over 10-12 years," the annual report added.

The peak production from the three fields is expected to reach about 15 per cent of India's projected demand that year, it said.

The D1-D3 field was India's first deepwater gas field to be put on production in April 2009.

"While there were initial setbacks due to geological surprises, the RIL-BP joint venture through its efforts and further investments extended the field life upto February 2020, maximising recovery from the field," it said.

The KG-D6 Block has so far produced an overall 3 trillion cubic feet equivalent of gas, oil and condensate.

The block has established several global benchmarks in terms of operational performance, including 99.9 per cent uptime and 100 per cent incident-free operations.

"Majority of the production facilities established for development of the gas fields will be utilised towards development of the three new fields," it added.

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