RIL, BP get panel nod for $4-billion investment in KG Basin: DGH
ET Bureau|
Feb 26, 2018, 11.37 PM IST
NEW DELHI: An official panel has approved $4-billion investment plans by Reliance Industries and BP to develop three sets of natural gas discoveries in the KG Basin, the Directorate General of Hydrocarbons (DGH) said on Monday.
“Management committee has today approved 3 FDPs (field development plans) in block KG-DWN-98/3 (RIL, BP & Niko), which will bring an envisaged capex investment of around $4 billion (Rs 26,000 crore) in the prolific eastern offshore of India,” DGH tweeted.
Before beginning to develop an oil or gas field, companies prepare a field development plan and seek its acceptance by a management committee comprising representatives of the companies as well as the oil ministry and DGH. Only after a nod from the management committee, companies can begin developing these fields. With 60% stake, Reliance is the operator of the KGDWN-98/3, or KGD6 block. BP holds 30% and Niko 10% in the block.
Three field development plans approved on Monday relate to MJ and two clusters referred to as satellite fields, according to a BP spokesperson. These three projects are expected to start producing from 2022 and will together have a peak output of around 20 million metric standard cubic meters per day, according to BP.
Last June, Reliance and BP had said they planned to pump in $6 billion to produce 30-35 million cubic meters of gas a day phased over 2020-2022. The plan included development of R-series project as well as MJ and satellite fields. The field development plan for R-series has already been approved.
Development of these natural gas fields discovered years ago by Reliance was delayed due to lower domestic gas prices. India follows a formula pricing for locally-produced gas, which is linked to international rates but not attractive enough for private investors to deploy their billions.
After the government allowed higher prices last year for gas produced from difficult fields such as some of those in the KG Basin, Reliance and BP dusted off their previous plans and submitted investment proposals to the government. The new prices available to gas from difficult fields is more than double that of rates applicable to gas from ordinary fields.
“Management committee has today approved 3 FDPs (field development plans) in block KG-DWN-98/3 (RIL, BP & Niko), which will bring an envisaged capex investment of around $4 billion (Rs 26,000 crore) in the prolific eastern offshore of India,” DGH tweeted.
Before beginning to develop an oil or gas field, companies prepare a field development plan and seek its acceptance by a management committee comprising representatives of the companies as well as the oil ministry and DGH. Only after a nod from the management committee, companies can begin developing these fields. With 60% stake, Reliance is the operator of the KGDWN-98/3, or KGD6 block. BP holds 30% and Niko 10% in the block.
Three field development plans approved on Monday relate to MJ and two clusters referred to as satellite fields, according to a BP spokesperson. These three projects are expected to start producing from 2022 and will together have a peak output of around 20 million metric standard cubic meters per day, according to BP.
Last June, Reliance and BP had said they planned to pump in $6 billion to produce 30-35 million cubic meters of gas a day phased over 2020-2022. The plan included development of R-series project as well as MJ and satellite fields. The field development plan for R-series has already been approved.
Development of these natural gas fields discovered years ago by Reliance was delayed due to lower domestic gas prices. India follows a formula pricing for locally-produced gas, which is linked to international rates but not attractive enough for private investors to deploy their billions.
After the government allowed higher prices last year for gas produced from difficult fields such as some of those in the KG Basin, Reliance and BP dusted off their previous plans and submitted investment proposals to the government. The new prices available to gas from difficult fields is more than double that of rates applicable to gas from ordinary fields.
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