BP and Reliance say Indian projects set for first gas in mid-2020 to supplement LNG imports

Tuesday, 04 February 2020
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BP of the UK and one of India’s largest conglomerates, Reliance Industries, are on track for first gas from mid-2020 from projects developed to open up new Indian production when the nation is also increasing its LNG imports.

The RIL-BP joint venture has committed an additional $5 billion of investments towards monetizing about 3 trillion cubic feet equivalent of natural gas, or 500 million barrels of oil equivalent, from reserves in three projects.

The projects are named, R cluster, Satellite cluster and the MJ fields.

“These projects will utilize the existing gas production infrastructure. Further, this infrastructure can act as a hub for development of any discovery from contiguous areas,” said the BP-RIL partnership.

BP and Reliance sanctioned the projects in natural gas fields in the Krishna Godavari Dhirubhai offshore the East Coast of India.

India's Krishna-Godavari Basin covers more than 19,000 square miles offshore the state of Andhra Pradesh in the Bay of Bengal.

The KG-D6 block was Reliance’s first offshore gas field development and its first underwater discovery. It was also India's largest deposit of natural gas when first found in 2002.

“The first-gas from these fields is expected in mid-2020,” they stated.

“The peak production from these three fields is expected to reach 1 BCFe per day which is about 15 percent of envisaged Indian demand,” they explained.

The RIL-BP joint venture also confirmed that it had completed the safe cessation of production in a planned manner, from the D1 D3 field in Block KG D6, also off the East Coast.

India consumes more than 5 billion cubic feet a day of natural gas and aspires to double gas consumption after 2022.

The offshore gas supplies will be in addition to LNG imports which in December 2019 surged for a ninth month in the current fiscal year as more volumes were imported at a lower cost from countries such as Qatar, the US, Australia and West African nations.

LNG imports for December jumped by 22.7 percent to 2.08 million tonnes compared with the 1.70MT received in December 2018.

The main operating terminals on India’s West Coast are at Dahej, Hazira and Dabhol, near Mumbai. The newest terminal at Mundra is also now operational.

There is also the Kochi facility in the southwest state of Kerala and one East Coast terminal at Kamarajar, 25 kilometres north of Chennai Port in Tamil Nadu. 

India imports about 250 cargoes a year, mainly from Qatar, the US, Russia Australia and Africa.

The import figures also showed that December LNG imports cost India around $800M during the month, less than the $900M spent in December 2018.

The cost of the fuel from April to December 2019 was about $7.1Bln versus $8.0 Bln in the year-ago period.

India's current monthly LNG requirements for the regasification network is around 30 shipments.

The BP-RIL ventures will come on stream as the nation's domestic production of natural gas has been falling. For the month of December 2019, the output was 2.64 billion cubic metres compared with 2.86 Bcm in December 2018, down 7.9 percent.

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