Reliance Industries (RIL) is likely to deliver natural gas from the nation's most prolific field to its first customer, Nagarjuna Fertiliser (NFL), tomorrow.
RIL's eastern offshore KG-D6 field started producing gas on April 1 and the initial volumes were used for pressuring the pipeline and maintaining the minimum buffer in the line.
"We have been told that gas will reach our plant at Kakinada in Andhra Pradesh in next couple of days... Maybe even tomorrow," a NFL official said.
The NFL plant is just 60 km away from RIL's gas processing facility at Gagimoga near Kakinada.
RIL is currently producing five million cubic meters per day (mmcmd) of gas from Dhirubhai-1 and 3, the first two of the 18 gas fields in KG-D6 block. Output is expected to be ramped up to 40 mmcmd by July and to peak 80 mmcmd by next year.
The company had last month signed gas sales and transportation contracts with 12 fertiliser companies.
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"Fertiliser firms will pay RIL the rupee equivalent of $4.20 per million British thermal unit (mmBtu) plus taxes and transportation," a Petroleum Ministry official said.
"The exchange rate will be the average of rupee-dollar rate of the previous month. So, all the sales that will happen in April will be billed at the average of reference rate for March," he said.
Of the 15.35 mmcmd gas distributed among 15 urea making plants of 12 fertiliser firms, NFL is to get 1.55 mmcmd.
The delivery price, including taxes and transportation charges, of RIL gas in Andhra Pradesh would be $5.34 per mmBtu while in Maharashtra it would cost $5.87. In Gujarat, it would be $5.87 and along the HVJ pipeline $6.21.
KG-D6 gas will land at Kakinada in Andhra Pradesh, from where it will be transported to Bharuch in Gujarat through a 1,386-km pipeline laid by RGTL. In Gujarat, Reliance will use the pipeline network of Gujarat State Petronet to take the gas to end-consumers as well as connect to HVJ pipeline.
Fertiliser Secretary Atul Chaturvedi, at the time of signing of Gas Sales and Purchase Agreement between RIL and fertiliser firms, had said that KG-D6 gas, which is at least 25 per cent cheaper than alternate fuels like naptha, will help save Rs 2,000-3,000 crore in fertiliser subsidy annually.
The supply of natural gas to fertiliser units would result in additional production of about 7 million tonnes of urea per annum.
The fertiliser firms had also signed a separate Gas Transportation Agreement with Mukesh Ambani-owned Reliance Gas Transportation Infrastructure for transporting the gas through its 1,396-km East-West pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat.