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RIL to pump out K-G gas in a month

March 13, 2009 08:38 IST

Mukesh Ambani's Reliance Industries is likely to begin gas production from the Krishna-Godavari basin by mid-April, about a month after the previous deadline of mid-March.

"Technical tests are almost over and the pipeline is being synchronised with the Jamnagar refinery. We hope to begin production within a month," said an official, on condition of anonymity.

The earlier date of early March to commence trial production came last month from Union Petroleum Secretary R S Pandey.

However, RIL is yet to officially announce a date. Said a spokesperson, "We are yet to get a clearance from the technical team." An e-mail to RIL wasn't answered.

Sources said only 100 km of the pipeline remains to be test-fired with gas. A small patch of less than a km of the line in Maharashtra required finishing touches. RIL has been using gas from GAIL during the past three months to test-fire the 1,440-km east-west pipeline, India's longest, from Kakinada in Andhra Pradesh to Bharuch in Gujarat.

It will transport gas from the world's largest gas discovery at the Krishna-Godavari (K-G) basin in the Bay of Bengal to Jamnagar in Gujarat, where RIL has set up the world's largest petroleum refinery.

Sources said RIL first test-fired gas into the first section of the pipeline, from Valsad to Ankot in Gujarat, in June last year.

The pipeline is being implemented by group company, Reliance Gas Transportation Infrastructure. It has a tie-up with Gujarat State Petronet to transport gas from Bhadbhut in Bharuch to RIL's refinery and the petrochemical complex in Jamnagar. RIL will bring gas up to Bharuch and GSPL will transport it using its existing pipeline between Bharuch and Rajkot, and through new pipelines laid up to Jamnagar.

Sources said the pipeline would be also connected with GAIL's Hazira-Bijaipur-Jagdishpur pipeline and the Dahej-Bijaipur pipeline network at Ankot in Gujarat. Apart from this, it will be networked with the Dahej-Uran and the Dabhol-Panel pipeline network at Mashkal in Maharashtra. At Kakinada, the pipeline will receive gas from the K-G basin at Oduru in Andhra Pradesh. More than 1,500 workers, including skilled workers from China, are working to lay the pipeline, co-ordinated by two offices at Mumbai and Kakinada.

RIL will initially start gas production from eight wells, with the initial output likely to be 5 million standard cubic metres a day. This will rise to 15 mmscmd by March-end and to 40 mmscmd by July/August, and could go up to 120 mcmd.

Fertiliser companies are expecting a draft agreement from RIL on supply of gas by early next week. They hope the gas will reach their units by April or early May.

The first tranche of gas from the K-G basin will be made available only to 15 urea units of major fertiliser companies. These include Chambal Fertilizers and Chemicals, Indian Farmers Fertilizer Cooperative Ltd, Krishak Bharati Cooperative Ltd, Tata Fertilizers and Indo Gulf Fertilizers, a unit of Aditya Birla Nuvo Ltd.

"There are terms and conditions we don't agree with RIL on. We are negotiating with the fertilizer industry and hopefully the issues will resolve by next week. We expect the gas in May," said U Awasthi, Managing Director, IFFCO.

Awasthi added that fertiliser companies had rejected a draft agreement sent by RIL, as there were issues regarding payment in dollars for gas supplies and continuous supply and delivery.

The Bombay High Court, in an interim order this January, had allowed RIL to sell gas from the K-G basin. The court is likely to come out with the final verdict this month.
P B Jayakumar and Kalpana Pathak in Mumbai