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Gas output from KG-D6 block falls to record low

Current production at 15.5 mmscmd after the 9th well was shut

The precipitous fall in gas production at Reliance Industries’ KG D6 block continues unabated. KG D6 output hit an all-time low of 15.5 million standard cubic metre (mmscmd) per day this week,in a bad omen for the country,which hopes to augment gas-based power and fertiliser production.

“RIL on April 2 shut the well A1 on the main producing fields of Dhirubhai-1 and 3 (D1&D3) in Krishna Godavari basin block KG-DWN-98/3 or KG-D6 for reservoir build-up study,” according to a status report of the directorate general of hydrocarbons (DGH).

The development is expected to increase the urgency within the government to devise a gas price pooling mechanism to prevent Rs 1 lakh crore investments in gas-based generation capacity becoming non-performing assets.

The government appears favourably inclined to double the current gas price of $4.2 per million British thermal unit (mmbtu),following recommendation of a committee headed by C Rangarajan,chairman of the Prime Minister’s Economic Advisory Council.

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Imported gas will continue to be costlier even if the price revision for domestic gas is implemented. Price revision for D6 gas is due in 2014.

Already,gas allocation from KG D6 has reduced to nil for power projects.

Minister of state for power Jyotiraditya Scindia has called a meeting of the empowered group of ministers to consider changing the priority of gas allocation for power sector as against fertiliser now.

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Initially,the KG D6 block was expected to achieve peak production of 80 mmscmd and half of the output was to go to the power sector.

Power sector comes third on the government’s priority list for allocation after fertiliser industry and LPG plants. Gas supply to the fertiliser sector,however,remains unaffected.

RIL has so far drilled 22 wells on D1&D3 fields but has put only 18 on production so far. Half of these wells are now shut.

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KG-D6 fields,which began production in April 2009,had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress shut down several wells.

Production further plummeted to 15.5 mmscmd this week after the contractor shut the ninth well.

First published on: 12-04-2013 at 12:51:48 am
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