Reliance Industries plans to invest $200 to 250 million during the current fiscal in drilling new wells at its D6 gas block in Krishna Godavari basin, off the Andhra coast.
Reliance and its Canadian partner Niko Resources will in 2005-06 begin a 2.49 billion dollar development plan that envisages producing 40 million standard cubic meters per day of gas by March 2008 from two gas fields in the block.
The consortium will drill two of the 34 developmental wells planned for bringing to production the Dhirubhai 1 and 3 fields, an official in the consortium said.
"One exploration well, D6-E1 is currently drilling. Five additional exploration wells, including one well on the new 3200 sq km seismic shoot, and two development wells are scheduled for fiscal 2006," he said.
Other development activities planned for fiscal 2006 include seismic, facility construction and infrastructure.
Reliance has found gas in 9 out of the 12 wells drilled so far in deep sea block KG-DWN-98/3 (also known as KG-D6) and 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.
Reliance, the operator of the block with 90 percent stake, will produce 40 million standard cubic meters per day for 7.5 years from discoveries Dhirbuhai 1 and 3 from a total of 34 development wells.
Niko Resources holds 10 percent interest in the block where the operator claimed it has found 14 trillion cubic feet of gas reserves.
The official said first gas will now land in March 2008 as against earlier August 2007 at a gas processing facility near Kakinada through a 35-km, 24-inch diameter pipeline.
The proposed initial development covers only 4.5 per cent of the total block area (7645 sq km). "Considerable upside potential exists in the form of already known discoveries such as Dhirubhai 2, 4, 5, 6, 7, 8 and 16 and other possible discoveries from the large area of the block yet unexplored."
The initial development of Dhirubhai 1 and 3 gas fields will cater to the production rate of 40 million standard cubic meters per day. However, the facilities shall be modular in design so as to augment the capacity to 80 mmscmd.
The first gas from the block will be sold to National Thermal Power Corp's Kawas and Gandhar power plants in Gujarat, for which a pipeline is proposed to be laid from Kakinada to Ahmedabad. NTPC will take about 12 million standard cubic meters per day of gas.
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