Reliance Industries gas output to go up

New Delhi: After experiencing a decline, Reliance Industries is likely to regain 60 million standard cubic meters per day of natural gas output from its eastern offshore KG-D6 fields by April, oil regulator DGH said on Tuesday.

Reliance has seen natural gas output fall to 50-52 mmscmd during recent times from over 60 mmscmd achieved in mid-2010 due to reservoir complexities.

"They (Reliance) are producing natural gas from 18 wells currently. Two more wells have been drilled (but not put on production) and another two are expected to be done by March.

"Once all 22 wells come onstream sometime in April 2011, gas output will again touch 60 mmsmcd," Directorate General of Hydrocarbons (DGH) Director General S K Srivastava said here.

The Dhirubhai-1 and 3 fields, known as D1 and D3, in the Krishna Godavari basin have seen output fall from 53-54 mmscmd achieved in mid-2010 to 42-44 mmscmd in the week ending December 26.

Besides D1 and D3, D-26 or MA oilfield in the same block, is producing about 8 mmscmd as associated gas. Together, the output from KG-D6 currently stands at 50-52 mmscmd.

Srivastava said there was nothing alarming about the fall in output as "wells behave differently at different times", producing different volumes of gas at different times.

"Reliance have a commitment to drill 22 wells in the first phase of development (of D1 and D3 fields) by March/April 2011 and we will ensure they meet the commitment," he said.

D1 and D3 are the largest among the 20 oil and gas finds that Reliance and its Canadian partner Niko Resources have made in the Krishna Godavari basin KG-DWN-98/3 or KG-D6 block off the Andhra coast.

"The reservoir is a complex one," he said.

Reliance has been forced to restrict production from the MA field to 18,200 barrels per day due to high water and gas output, sources said, adding the field was yielding more water than oil and that even 8 mmscmd of gas in comparison to 20,000 bpd of oil was considered quite high.

KG-D6 block had in mid-2010 hit a peak of 60 mmscmd after which the output has fallen, sources said.

Sources said Reliance will have to drill more wells to boost output to the approved peak of 80 mmscmd.

Currently, 18 wells on D1 and D3 have been completed and hooked to production system but only 16-17 are producing.

The company is currently selling 14 mmscmd of gas produced from KG-D6 to fertiliser plants, 26 mmscmd to power plants and remaining 12 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.

Reliance had previously stated that it is carrying out further optimisation exercises at the MA oilfield in view of increasing water production levels. The field has five oil producing wells and one gas injection-cum-gas producer well.

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