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Reliance, BP spending $5 bn on three gas projects in KG-D6 block: Bernard Looney, BP
BP, British oil and gas firm, and Mukesh Ambani-led Reliance Industries (RIL) are collectively spending $5 billion to execute three gas development projects in the Krishna-Godavari (KG) basin, said Bernard Looney, BP’s chief executive (upstream), on Tuesday.
“Strong relationship between BP and reliance is another great example of what can be achieved by working together at scale. Together we are spending up to $5 billion to execute three gas development projects in the KG-D6 block and together we are expected to bring about one billion cubic feet per day of new domestic gas on stream by 2022,” said Looney.
RIL and BP had last month announced the sanction of the MJ project, also known as D55, in Block KG D6. MJ would be the third of three new projects in the Block KG-D6 Integrated Development Plan.
The approval follows sanctions for the development of ‘R-Series’ deep-water gas field in June 2017 and for the satellites cluster in April 2018. Together the three projects are expected to develop a total of about three trillion cubic feet of natural gas.
He added that the companies’ hope to unlock a new offshore base in Odisha and are currently working in the Mahanadi basin to explore ways of both economically developing discoveries and building a pipeline of exploration and development opportunities.
“As partners, we are delighted to also win the new KG-UDW1 block, which is located adjacent to our existing KG-D6 block and within a reasonable time and distance of the existing infrastructure, it, therefore, provides additional resources to extend the production profile for the KG-D6 facilities,” Looney said.
BP exploration and RIL had also won an ultra deep-water offshore block in the KG basin under the latest Open Acreage Licensing Programme.
According to Looney, India as per the current trends will overtake China as the largest growth market for energy in the mid-2020s and according to BP’s energy outlook, the country’s primary energy demand will increase two-and-a-half times till 2040.
“India has a natural gas base with a potential to meet 50 percent of anticipated demand for gas through to 2050. Natural gas burns at half of the emission of coal for power generation and offers significant benefits for air quality. In renewables, there are large untapped solar and wind resources with a potential to be utilized at a cost which is increasingly competitive with hydrocarbons,” Looney said.
According to BP’s 2018 annual report the company has participating interest in two oil and gas blocks (KG-D6 30 percent and NEC25 33.33 percent) both operated by RIL.
BP also has a stake in a 50:50 joint venture (India Gas Solutions) with RIL for the sourcing and marketing of gas in India.
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