Mukesh Ambani led Reliance Industries (RIL) and British energy giant BP Plc. have agreed to invest ₹40,000 crore ($6 billion) in developing discovered gas fields in the Krishna Godavari (KG) basin’s block KG-D6 after a lull of six years.
It includes development of ‘R-Series’ deep water gas fields in Block KG-D6 off the eastern India, which alone is expected to produce up to 12 million cubic metres (425 million cubic feet) of gas a day, coming on stream in 2020.
“This is the first of three planned projects in Block KG-D6 that are expected to be developed in an integrated manner, producing from about 3 trillion cubic feet of discovered gas resources. RIL and BP plan to submit development plans for the next two projects for Government approval before the end of 2017,” said a RIL statement adding that the investment expected to bring a total of 30-35 million cubic metres (1 billion cubic feet) of gas a day new domestic gas production on-stream, phased over 2020-2022.
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Mr. Ambani, CMD of RIL, said: “We are delighted to progress these developments, which will provide India with much needed indigenous energy and support the Prime Minister’s call for import substitution and the development of a gas-based economy. The solid relationship between our two companies is a great example of what can be achieved while working together at scale.”
Welcoming the investment Bob Dudley, BP Group Chief Executive, said, “This is an important step forward for BP in India. Working closely together, Reliance and BP are now able to develop these major deep water gas resources offshore India efficiently and economically. It is testament to our commitment to working in partnership with Reliance and with the Government to produce more energy in India, for India.”
India consumes over 5 billion cubic feet a day of natural gas and aspires to double gas consumption by 2022. Gas production from the integrated development is expected to help reduce India’s import dependence and amount to over 10% of the country’s projected gas demand in 2022 or substituting $20 billion worth on LNG imports.
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The implementation of other two projects in Block KGD6 is subject to applicable regulatory and Government approvals.
Expanding partnership
RIL and BP will expand their existing partnership for strategic cooperation on new opportunities across India’s energy sector. Under the agreement the two companies will jointly explore options to develop differentiated fuels, mobility and advanced low carbon energy businesses in India, as India transitions to a low-carbon world.
The companies expect to collaborate, in addition to the conventional transportation and aviation fuels retailing, on unconventional mobility solutions, addressing electrification, digitization and disruptive mobility trends. Together, these collaborations will seek to address the mobility needs of urban, rural/farm, industrial/commercial, and highway consumers in India, applying the leading capabilities of both partners.