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    Reliance, BP Sanction Third Gas Project in India's KG Basin

Summary

The approval of the MJ project follows sanctions for the development of R-Series deep-water gas field in June 2017 and for the Satellites cluster in April 2018.

by: Shardul Sharma

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Reliance, BP Sanction Third Gas Project in India's KG Basin

Indian private sector firm Reliance Industries and partner BP June 11 announced the sanction of the MJ project, also known as D55, in Block KG D6, offshore the east coast of India. MJ is the third of three new projects in the Block KG D6 integrated development plan.

The approval of the MJ project follows sanctions for the development of R-Series deep-water gas field in June 2017 and for the Satellites cluster in April 2018. Together the three projects are expected to develop a total of about 3 trillion ft3 of discovered gas resources with a total investment of Indian rupees 350bn ($5bn). These projects together, when fully developed, will bring about 1bn ft3/day of new domestic gas onstream, phased over 2020-2022, Reliance said.

In 2011 BP took a 30% stake in multiple oil and gas blocks in India operated by Reliance, including the producing Block KG D6. Reliance owns 60% stake while Niko Resources owns the remaining 10%.

“Bringing these three discoveries to production, as promised in 2017, by leveraging the existing infrastructure has been the primary objective of the Reliance - BP joint venture. The gas will satiate the increasing demand for clean fuel in the country, save foreign exchange and reduce dependency on imported gas,” Mukesh Ambani, managing director of Reliance, said.

India is looking to increase the share of natural gas in its energy mix to 15% by 2030 from a little over 6% at present. The rationale is to ease the severe air pollution in urban clusters. The share of natural gas in the Indian energy mix has fallen to 6.2% compared with over 10% eight years ago owning to fall in KG basin gas output.   

“We are building an important upstream business in India, helping to supply the country’s growing gas market. Working closely with Reliance, we are efficiently developing discovered resources, with focused exploration to give options for the future. This latest investment is a further demonstration of BP’s commitment to India and helps support India in addressing the dual challenge and moving to a low carbon future,” BP CEO Bob Dudley said.

MJ is a gas condensate field and is the third field under development as part of the KG D6 integrated development campaign. The project is in 700-1100 metres water depth, with a well depth of 4200 metres below mean sea-level in a high-temperature and pressure environment. It comprises of wells connected to a subsea production, with tie-back to a floating production storage and offloading (FPSO) vessel to process and separate liquids, and gas which will be exported to the onshore terminal through one of the existing 24-inch trunk pipelines. The project is expected to begin production in mid-2022.

The first of the three KG D6 projects under development, the R-Series project, is in execution phase, Reliance said. All six wells have been drilled. With this, the first installation campaign has been successfully completed. First gas from this project is on-schedule and expected by mid-2020, the company said. The second project, the development of the Satellites cluster, is on track with all major contracts awarded to deliver first gas by mid-2021, it added.