NEW DELHI: The second wave of oil and gas discoveries in the crucial KG basin came onstream on Friday with the Reliance Industries-BP Plc combine announcing the start of production in Asia deepest gas block: the deepwater R cluster. This is the first of three such deepsea projects that are expected to meet about 15 per cent of India’s gas demand by 2023.
The RIL-BP combine is developing three deepwater gas projects in the Krishna-Godavari basin block D6 (KG D6): the R Cluster, Satellites Cluster and MJ. "These projects will utilise the existing hub infrastructure in KG-D6 block," a joint statement by the two firms said. The KG D6 block’s operator is Reliance with a 66.67 per cent stake, and the rest is held by BP Plc.
According to the companies, the R Cluster is located about 60 kilometers from the existing KG D6 Control & Riser Platform (CRP) off the Kakinada coast. The block comprises a subsea production system tied back via a subsea pipeline and is Asia's deepest offshore gas field-located at a water depth of greater than 2000 meters. The field is expected to reach plateau gas production of about 12.9 million standard cubic meters per day (mmscmd) in next year.
The next project, the Satellites Cluster, is expected to come onstream in 2021, followed by the MJ project in 2022. Peak gas production from the three fields is expected to be around 30 mmscmd by 2023, which is expected to be about 25 per cent of India’s domestic production at that point. The R-Series field was previously expected to begin production in June, the pandemic had disrupted supply chains and delayed the launch.
The R-Cluster will have a peak output of 12 mmscmd, while Satellites would produce a maximum of 7 mmscmd. The MJ field, meanwhile, will start production in the third quarter of 2022 and will have a peak output of 12 mmscmd.
In November last year, Reliance had auctioned the first load of gas from the newer discoveries in the KG-D6 block, asking bidders to quote a price (expressed as a percentage of the dated Brent crude oil rate), supply period and the volume of gas required. Considering the current average Brent price of around USD 50 per barrel, this gas will cost around USD 4.2 per million British thermal unit.