Reliance Industries has warned of delays in beginning natural gas production from its Mahanadi basin block, off Orissa coast, because of government delays in issuing necessary permissions for pipelines to evacuate the gas to markets in West Bengal and Madhya Pradesh.
Over eight months have passed since Reliance applied for permission to lay pipelines from Basudebpur on Orissa coast to Haldia and Bhopal, but the oil ministry has neither notified the competent authorities for acquisition of right of user nor has it invited bids from third parties interested in taking capacity in the pipelines, industry sources said.
"Gas evacuation is one of the critical aspects of field development and the delay in gazette notification of the nomination of competent authorities and expression of interest (EoI) under PMP Act is keeping the entire development process on hold," the company wrote to the ministry on August 28.
Similar delays on the company's proposed pipeline from Kakinada to Ahmedabad had delayed by more than one year the production of natural gas from its D-6 gas field off the Andhra coast. D-6 gas is now expected in June 2008.
RIL's block NEC-25 in Mahanadi basin holds 1 to 3 trillion cubic feet of gas reserves and the company was targeting initial production of around 20 to 25 million standard cubic meters per day from 2008-09.
The company has signed an MoU with West Bengal government for utilisation of gas in the state and was discussing a similar MoU with the Orissa government but delays on part of the Central government was holding up the entire project, the letter said.
The Central government has not invited expression of interest (EoI) from outside parties interested in taking capacity in the proposed pipelines.
Under the Petroleum and Minerals Pipelines Act, all new oil and gas pipelines are to be laid on common carrier principal, giving access to third parties.