Reliance gets govt nod for $2.49bn KG gas capex

The government has approved the $2.49 billion investment plan of Reliance Industries to develop its huge gas find in the Krishna-Godavari (KG) basin off the east coast.

"Reliance Industries will produce 40 metric million standard cubic meter per day (MMSCMD) of gas from Dhirubhai-1 and Dhirubhai-3 fields from the end of 2007 or early 2008," Vinod K Sibal, director general of the directorate general of hydrocarbons (DGH), said today.

"The development plan approved envisages Reliance investing $2.49 billion," he added.

The company has found gas in 9 out of the 12 wells drilled so far in the deepsea block KG-DWN-98/3 (also known as KG-D6). Only the first three discoveries - Dhirubhai 1, 2 and 3 have been declared commercial. Of  these, Reliance proposes to develop Dhirubhai 1 and 3 in the first phase of development.

Sibal said Reliance will produce 40 MMSCMD gas per day for 7.5 years from Dhibuhai 1 and 3 from a total of 34 development wells.

First gas will now land in March 2008 as against the earlier target of August 2007 at a gas processing facility near Kakinada through a 35-km, 24-inch diameter pipeline.

Reliance holds 90% interest in the wells with Canada-based Niko Resources holding the remaining 10%.

"The development plan has been approved based on our estimation of 5-6 trillion cubic feet (TCF) of proven gas reserves," Sibal said, adding the in-place reserves in the D6 block may exceed 14 TCF.