Reliance Industries Ltd (RIL), India’s largest company by market value, is set to commence natural gas production from its last discoveries at the MJ field in the KG-D6 block by March. The company, which is the operator of the block, earlier planned to start production in the December quarter, but it was delayed by three months.
With the commissioning of the MJ field, the overall gas output from RIL’s assets in KG Basin will increase by about two-thirds. RIL’s production from KG D6 assets is expected to increase to around 30 million standard cubic meters per day (MMSCMD) in FY24 from the current 19MMSCMD. The production is enough to meet up to 15% of India's gas demand. MJ field will have a peak output of 12 MMSCMD.
The revenue from RIL’s oil and gas business increased by 75% to ₹4,474 crore in the third quarter, while EBITDA jumped by 91% to ₹3,880 crore. The average price realisation for the gas from KGD6 was $11.3/million British thermal unit (MMBTU), which is much lower than the average Asian LNG price of $ 31/MMBTU. KGD6 production was stable at around19 MMSCMD, the company said in the third quarter result presentation.
RIL and BP plc, which hold a 33% stake in the KG Basin assets, will be using a floating production system at high-sea in the Bay of Bengal to bring to production the deepest gas discovery in the KG D6 block. The field also has oil deposits which will be produced using a floating system, called FPSO. The MJ gas find is located about 2,000 meters below Dhirubhai-1 and 3 (D1 and D3) fields, the largest fields in KG-D6. MJ is estimated to hold a minimum of 0.988 Trillion cubic feet (Tcf) of contingent resources.
According to the company presentation, the Phase-II drilling and completion campaign for production hole drilling is in progress. Floating Production Storage and Offloading (FPSO) is currently at the field location. FPSO hook-up and offshore testing are underway, to be followed by pre-commissioning and commissioning activities.
RIL and BP are developing three deep-water gas discoveries at KG-D6 --- R Cluster, Satellite Cluster and MJ. R-Cluster started production in December 2020 and the Satellite Cluster came onstream in April.
The Indian petroleum giant has so far made 19 gas discoveries in the KG-D6. D-1 and D-3, India's first deepwater gas field, were brought into production in April 2009, but they ceased to produce in February 2020. MA, the only oilfield in the block, was put into production in September 2008, but it also stopped producing in 2019.
