Kg-d6, Reliance Gas (ril) And India

By Author: Mike Smith
Total Articles: 103
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September 17, 2008 marked the coming to life of the deep-sea gas production marvel of India, Reliance's KG-D6 block in the Krishna Godavari basin in the Bay of Bengal. The world's largest gas discovery was made in 2002 and since has opened up a brand new horizon for India's economy and energy sector. Reliance's KG-D6 block is expected to produce 550,000 barrels of oil equivalent per day by the end of 2009 which promises to revamp the economy by reducing the cost on imports and also generating enough fuel to meet the increasing energy demand of India.

From the discovery of the field in 2002, RIL knew it had a mammoth task on its hands to develop this gas field that lay in a basin with limited prior geological knowledge and production history in the most challenging frontier - the deepwaters. The key lied in accelerating skills and knowledge by understanding and implementing technology. The challenges faced were:

a) To evacuate gas from reservoirs 60 kilometers offshore and up to two kilometers below sea bed.

b) No production history to draw hints from.

c) Dealing with the harsh operating conditions ...
... with cyclones, storms, swells and currents leaving only a four month construction window. As well as scorching temperatures of up to 50 degrees in summer, heavy rains and lack of skilled labor.

d) Onshore barren land not being supportive of infrastructure.

e) Multi billion dollar outlays and investment that made failure fatal.

Reliance Group dealt with all of the above and made KG-D6 the largest and most complex deepwater gas production facility in the world. It's been the world's fastest deepwater field development as it was accomplished in a record of six and a half years from discovery as against an average 8-10 years. It has the largest onshore gas handling plant with 80 MMSCMD (million standard cubic meters per day) capacity. The Early Production system (EPS) helped produce oil including FPSO (Floating, Production, Storage and Offloading) and sub-sea architecture in less than two years. It involved a peak workforce of 20,000 people inclusive of 200 contractors, consultants and suppliers in over 12 countries that made for project management and execution at a global scale. Reliance Group's KG-D6 is India's first deepwater oil and gas production facility with cutting edge deepwater technology for well construction and completion using state-of-the-art sub-sea technology. It is also the world's largest marine construction with 89 vessels operated over an approximate area of 400 sq. km. and an installation of 11,000 metric tons of steel equipment with 450 line kilometers of pipelines and umbilicals.

With India now being able to produce its own oil and gas it shall make for multiple positive impacts on the economy as a whole. The KG-D6 is only the first production from one field that is part of a larger discovery domain and is expected to contribute to foreign exchange and import bill savings as well as a subsidy reduction of $56 billion while increasing the nation's GDP by $86 billion. The benefits of hydrocarbon oil and gas production will reach India's millions as 550,000 barrels per day can provide CNG to over 50 million 2-wheelers, 5 million cars and 10 million trucks. It can help meet the lighting needs of 84 million urban and rural households as distributed power generation will make for 24,000 megawatts of power. The environmental benefits will also be significant as emission of harmful gases will be reduced manifold.

The entire energy scenario of India will be revamped as the price approved for sale of gas from KG-D6 to regulated/specified end-use sectors by the Empowered Group of Ministers (EGoM) is $4.2/MMBTU, this shall save approx. $17 billion of foreign exchange that accounts for 30% of India's net oil imports. Thereby competitiveness of India's industrial sector will improve significantly. Further, 40 MMSCMD gas has been allocated by the EGoM to four key gas-based channels with the break up being: 18 to power, 14 to fertilizer, 5 to City Gas Distribution (CGD) and 3 to LPG. The fertilizer sector is expected to save Rs. 3450 crore in terms of fertilizer subsidy with this allocation. Higher supplies and infrastructure will automatically create demand which will further spur investment in the hydrocarbon sector.

Oil & Gas from the KG - D6 project of Reliance Gas, the largest discovery in recent times and another feather in the cap for Reliance Industries which is India's largest and most successful private sector conglomerate marred only by the RIL RNRL Gas Dispute.