RIL and its partners BP plc of UK and Canada's Niko Resources plan to produce about 13 million standard cubic metres per day of gas for 13 years from D-34 discovery, known as R-Cluster, in the KG-DWN-98/3 or KG-D6 block by 2017-18.
Delhi's power problems could go for a toss if Gas Sales Agreement that GAIL (India) Limited has inked with Pragati Power Corporation Limited to supply 2 MMSCMD of R-LNG becomes operational. The peak demand for electricity in Delhi is slated to grow from the current 4100 MW to 5630 MW in 2010 as per the estimation of Central Electricity Authority.
Oil and Natural Gas Corp (ONGC) will shut down two key facilities at its largest gas field off Mumbai in January and February that will cut output by one-third.
GAIL, which currently markets 4.8 million standard cubic metres per day of gas from the fields lying in western offshore, will now get to market the entire output of 15.5 mmscmd from PMT fields, a move that will boost the company's annual revenue by about Rs 5,000 crore (Rs 50 billion), official sources said.
The government has slapped an additional penalty of $792 million on Reliance Industries for producing less than targeted natural gas from its eastern offshore KG-D6 block.
Originally, the company had planned to invest $2.47 billion to produce 40 mmscmd gas. However, with rig prices going up and more reserves being found in the block the company raised the capex and the planned output.
Sharp improvement in refining margin is expected to be the prime driving force.
Days after the Cabinet approved doubling of natural gas price from April next year, the Finance Ministry has written to Oil Ministry suggesting setting of a ceiling or an upper limit for the rates.
The government had in May last year disallowed $1.005 billion expense of RIL on the flagging KG-D6 gas fields for not implementing the approved field development plan.
As per the 15-day billing cycle, gas producers are to raise the first invoice at the revised price of $5.61 per million British thermal unit this weekend.
India's biggest oil producer Oil and Natural Gas Corp on Friday restored 70 per cent of gas supplies from Bombay High fields, which had earlier dropped to 20 per cent after a key oil facility was gutted in a fire two-days ago.
The Directorate General of Hydrocarbons last month recommended to the Oil Ministry that $792 million of the cost RIL has incurred in KG-D6 fields be disallowed for producing only an average of 26.07 million cubic meters per day of gas as against the target of 86.73 mmcmd in 2012-13.
The Cabinet on Thursday decided to allow Reliance Industries to almost double the price of natural gas from April provided the firm gave a bank guarantee to cover its liability if gas-hoarding charges are proved.
In the past, the absence of commercially viable gas prices had not only discouraged high-risk new exploration activity but also hindered the development of some of the existing discoveries, such as the satellite fields in the Reliance Industries' eastern offshore KG-D6 block.
RIL has been selling gas from KG-D6 at the same price since it started production in April 2009.
RIL has more than half a dozen undeveloped discoveries.
Reliance Industries will have to provide a bank guarantee of $135 million every quarter to get a higher price for natural gas from April 1 next year.
The KG-D6 fields, which began production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress led to more than a third of the wells shutting down.
Companies to hold rates in Delhi until new government is formed.
Energy conglomerate Reliance Industries and its partner BP plc on Friday said they have made a second deep-water gas condensate discovery in the Cauvery basin, off the east coast.
Indian oil and gas exploration companies work in silos.
Could get $8.4 per mmBtu from April 2014 by furnishing bank guarantee that would be encashed if D1, D3 gas hoarding proved
RIL, its partner BP plc of UK will invest about Rs 6,000 crore (Rs 60 billion) by 2016 to help sustain and improve recovery from the two main gas fields.
Barclays said the refinery would, however, now need to find new sources for the energy for its internal uses.
The 'failure' to drill the committed 50 wells on the KG-D6 fields led to natural gas output dramatically falling over the past three years.
A day after deciding to nearly double natural gas prices to $8, Finance Minister P Chidambaram on Friday hinted that power and fertiliser units may get gas at subsidised rates to keep electricity and urea costs down.
The 1,967 MW plant has not been operating since August because of stoppage of natural gas supplies from domestic fields.
For India's upstream sector that has seen no new discovery coming into production.
Government had proposed a revised investment plan for the main gas fields in the KG-D6 block.
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While the Cabinet has approved doubling of gas price from April 1 next year, Oil Ministry is proposing that old rates of $4.2 per million British thermal unit apply to gas from D1/D3 and MA fields in eastern offshore KG-D6 block till it proved that RIL had proved less than targets only because of geological factors.
Industry demands the basic customs duty on all steel imports to be raised to 25%
RIL's Dhirubhai-34, or R-Cluster field, in the flagging KG-D6 block was to produce about 13 million standard cubic metres per day of gas, equivalent to present day output from D1&D3 as well as MA fields, by 2017-18.
The pricing and marketing freedom for exploitation would be capped by a ceiling price.
The Cabinet Committee of Economic Affairs has approved a hike in gas prices from April 2014.
While the government had in June approved a new formula for pricing of all domestically produced natural gas, the Cabinet yesterday allowed the same principles to also be applied to Reliance Industries' currently producing fields in KG-D6 block subject to certain conditions.
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The Management Committee headed by Director General of Hydrocarbons R N Choubey refused to take a view on appointment of renowned reservoir consultants Ryder Scott, DeGolyer and MacNaughton, Gaffney, Cline & Associates or Netherland, Sewell & Associates to ascertain if RIL's claims of fall in reserves are actually true or the firm was hoarding gas by producing less, official sources said.
The agreement on pricing last month marks a significant step towards promoting energy security in the region, say Nisha Taneja & Samridhi Bimal.
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