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RIL seeks 12 months to validate peak output

business Updated: Oct 23, 2009 22:08 IST
Anupama Airy

Mukesh Ambani’s Reliance Industries Ltd (RIL) has informed the petroleum ministry that it is confident of producing 60 million standard cubic metres per day (mmscmd) of gas “on a sustained basis” from its D6 fields in the Krishna Godavari basin.

RIL has accordingly told the ministry that firm allocations of gas to consumers be made only for 60 mmscmd and for the remaining 20 mmscmd, allocations be made on a fallback or temporary basis only.

Stating this in his October 7 letter to the ministry, RIL President and CEO, P.M.S. Prasad said that while the gas field of its KG-D6 —currently under production — has the potential to produce 80 mmscmd of gas, “a sustained production of 80 mmscmd over a period of 12 months would be required to validate such potential.”

“It may therefore be prudent that allocation of gas beyond 60 mmscmd production levels be made on a fall back basis only.”

A senior petroleum ministry official confirmed the move and said, “We have already referred RIL’s letter to the Directorate General of Hydrocarbons (DGH) on October 13.”

“The DGH is requested to furnish its comments on the claims made by RIL regarding production of 60 mmscmd gas on a sustained basis and potential of producing 80 mmscmd in the context of request (by RIL) to Government for additional allocation of gas,” reads the ministry’s letter to the DGH.

This comes close on the heels of the meeting of the Empowered Group of Ministers (EGOM) — scheduled to meet on October 27 —for deciding the second phase of gas allocation from RIL’s KG-D6 gas fields. The EGOM has already allocated 40 mmscmd of gas from the KG-D6 block to users in power, fertiliser and other industrial sectors.

Confident of producing 60 mmscmd on a sustained basis, RIL has also told the ministry that allocation of an additional 10-15 per cent gas under firm allocations can be considered.

This, RIL said, is based on its experience of supplying gas over the last six months where it has observed that the monthly offtake of gas has been in the range of 80-90 per cent of the allocated quantities.

“Such lower offtake is not unusual and is on account of seasonal variations and planned and unplanned shutdowns,” RIL said.

“We therefore request that the government may allocate 10 to 15 per cent additional gas on firm basis beyond the targeted steady state of production (of 60 mmscmd). ” This implies that allocation of gas to customers may be increased to about 70 mmscmd from the current firm allocations of 44 mmscmd.