India's Reliance starts pumping deep-sea gas
India's Reliance Industries has begun pumping gas from the deep-sea Krishna Godavari Basin off the east coast in what it said Thursday marked a "quantum leap" towards national energy security.
The output from the field could double energy-hungry India's gas output, Petroleum Secretary R.S. Pandey said and help "accelerate" the country's industrial development.
"This is a momentous occasion for India. The clean energy from the discoveries of the KG-D6 block will be a boost for energy security and growth," said Mukesh Ambani, chairman of Reliance Industries, in a statement.
"At peak production of 80 standard cubic meters a day likely in a year's time, the supply will nearly double India's domestic gas production," Petroleum Secretary R.S. Pandey told reporters in New Delhi.
"It will reduce the oil import bill by 10 percent or about nine billion dollars annually, during peak production, at current prices," he added.
Reliance Industries said initial gas production from the discoveries of the KG-D6 block will be sold to gas-deprived Indian fertilizer and power firms.
"With this, the company has commissioned one of the world?s largest deepwater production facilities in the same block in which Reliance already discovered oil reserves earlier," the Reliance statement said.
India has been racing to discover new sources of energy to power its growing economy.
Reliance Industries' shares rose 83.05 rupees or 5.26 percent to 1,662.5 on the back of the announcement.
"Gas sales will generate 42 billion dollars in revenues over the 11-year life of the field," Pandey said.
At peak production, the KG-D6 facility is expected to produce over 550,000 barrels of oil equivalent per day, Reliance said.
Reliance has proposed investing another 5.91 billion dollars in developing nine more discoveries in its rich eastern offshore KG-D6 block, India's oil regulator said. The block is 10 percent owned by Canada's Niko Resources.
"There has been a global downturn but we will decide on the development plan in due course," Directorate General of Hydrocarbons Director General V.K. Sibal said.
India imports nearly 2.5 million barrels of oil a day or some 75 percent of its needs.
Reliance, India's most valuable by market capitalisation, is a corporate behemoth that has straddled the economy for decades with activities ranging from petrochemicals to retail.
Ambani has said he was making it a personal quest to "progressively end India's energy insecurity and dependence".
Meanwhile, India announced separately it will launch auctions for 70 oil and gas exploration acreages as it seeks to lessen dependence on foreign fuel sources.
The number of blocks on offer under the eighth round of auctions under the New Exploration Licensing Policy (NELP) would be the largest ever, Pandey said.
"NELP-8 is scheduled to be launched April 9," he said.