Reliance Industries’ prolific gas field in Bay of Bengal cannot sustain at a “lower” gas price of $2.40 per million British thermal unit (mBtu), investor advisory firm Bernstein Energy has said in a report.
“At a lower gas price of $2.40 per mBtu, development of deep water gas would not be possible and would discourage deep water gas exploration, which we believe is critical for India’s long-term energy security,” the US firm said in a July 30 report. RIL is locked in a bitter gas supply dispute with a firm of Anil Ambani Group which is seeking fuel at $2.34 per mBtu. “Successful resolution to the gas pricing dispute is important for RIL and for the future of Indian deep water gas,” it said.
“While the gas dispute between the Ambani brothers continues to cast a shadow over the Dhirubhai gas development, we believe that the government is right to back a $4.20 per mBtu gas price and that this price will prevail.”
Bernstein Energy said deep water exploration off India’s east coast has yielded one of the world’s largest deepwater gas discoveries over the past decade — Dhirubhai in block KG-D6. Following start-up of this field in April, RIL has increased gas production by one billion cubic feet per day, which is equivalent to 25 per cent of India’s total current gas production.