News: Reliance likely to invest $6-7 b in KG basin

(BL 13/05/2006) Hyderabad - Reliance Industries Ltd on Friday hinted at investing about $ 6-7 billion (about Rs 27,000 crore to Rs 32,500 crore) to tap the huge natural gas potential in the Krishna-Godavari (KG) basin wells.

By mid-2008, the first phase of the gas project in the KG basin will be ready. This project has the potential to add about $20 billion to the GDP, and potentially support10,000 MW of power generation, according to R.P. Sharma, President of Gas Business, Reliance Industries.

Speaking about the potential in the KG basin from a developer's perspective and the company's plans, at a conference on natural gas hosted by the Confederation of Indian Industry (CII), . Sharma said, "Given the current market demand and huge capacity addition in the power sector, where a significant quantity of power is being augmented through natural gas as a fuel, we would be in for a huge shortfall.. "With a hold on 3,40,000 sq. km for exploratory area, we are leaders in the private sector," Sharma said.

"Reliance is extremely optimistic on the overall outlook of the potential in the sector and has initiated several projects, and KG is a priority area. We estimate that there is potential for 10-15 billion barrels from the 16 blocks that we have taken up (of them eight are deep water)," he explained.

The Dhirubhai Ambani fieldis spread over 8,000 sq km, of which barely 20 per cent has been explored. "Of the 15 exploratory wells, we have found gas in 14 wells, and it is estimated that this could have about 14 TCF of gas," he said.

STAGE SET FOR PIPELINE

As a part of this pipeline project, Reliance is in the process of laying down a 1,400-km, 48-inch pipeline from Kakinada to Ahmedabad. The first batch of 10,000 tonnes of pipeline (imported) is set to land in Andhra Pradesh on May 18.

However, Sharma said, "there are certain areas of concern that need to be addressed from a policy perspective, these refer to an independent regulator, code of grid connectivity, tariff rate issues and a pipeline policy. There should be non-discriminatory use of pipeline, offering consumers a choice to pick his supplier".