Reliance says ready to start gas production by Feb end

Reliance Industries has informed the government that it will be ready to start gas production from its eastern offshore KG-D6 fields by February end, ending the fuel deficit faced by power and fertiliser units. The company's CEO for Oil and Gas, P M S Prasad, on January 9 wrote to the Petroleum Ministry informing that gas output from KG-DWN-98/3 or KG-D6 field in the Krishna Godavari basin off the east coast, was on track to start production by February-end. Petroleum Ministry officials said the government had last week asked Reliance to give in writing the date by which the company would be ready to start production. In response, Prasad wrote to the ministry that Reliance would be ready for gas production by end-February "subject to weather and marine conditions." Initial output from KG-D6 would be in the range of 15 to 25 million standard cubic meters per day, which would ramp up to 40 mmscmd in four to five months and to 55 mmscmd before the year end. With the Government giving fertiliser and power sector the topmost priority for sale of KG-D6 gas, the output would help eliminate power deficit in Andhra Pradesh, Maharasthra and Gujarat. It would also reduce fertiliser subsidy as KG-D6 gas would be priced at USD 4.20 per million British thermal unit, half the price of alternate feedstock like naphtha. However, Reliance may not be able to sell the gas as the Mumbai High Court has restrained the company from selling the fuel to any company other than Anil Ambani-led Reliance Natural Resources Ltd and state-run NTPC Ltd. The former by virtue of a family agreement and the state-run firm from an unsigned contract of 2005, claim 40 mmscmd gas from D6 and has taken Reliance to court to get their share.