Reliance Industries Ltd (RIL) is set to commence natural gas production from the KG-D6 block, off the Andhra coast in India, this quarter. The block is India’s only deepwater block under production and will reportedly meet 15% of India’s gas demand. The block is said to have averaged 20 million standard cubic meters per day of production in the January-March quarter. The gas will be produced in partnership with UK-based energy company BP.
RIL and BP are currently nearing the start of production from their giant MJ deep-water project, which will significantly boost gas output from the east coast asset. The MJ field is expected to commence production in the first quarter of the financial year 2023-24 (April 2023 to March 2024). RIL is the operator of the block and had earlier planned to start production in the December quarter, but it was delayed by three months.
The two companies are spending approximately $5 billion on developing KG-D6 through three different projects, aimed at rejuvenating gas production from the offshore asset. While the first two developments – R-cluster and Satellite Cluster – have already started gas production, MJ is now nearing completion. The start of MJ is expected to take KG-D6 gas production to 30 million standard cubic meters per day in FY24, according to RIL’s presentation.
Testing and commissioning are underway in the MJ field and one well has been opened as part of the ongoing testing of the integrated production system. The company has already sold 6 million standard cubic meters per day of gas to companies in the city gas, power, and fertilizer sectors.
RIL and BP plan to use a floating production system in the Bay of Bengal to bring the deepest gas discovery in the KG-D6 block to production. The MJ-1 gas find is located about 2,000 meters directly below the Dhirubhai-1 and 3 fields, the first and largest fields in the KG-D6 block. MJ-1 is estimated to hold a minimum of 0.988 trillion cubic feet of contingent resources.
In summary, RIL’s commencement of natural gas production from the KG-D6 block is set to meet 15% of India’s gas demand. The partnership with BP on the MJ deep-water project is expected to significantly boost gas output from the prized east coast asset.