Reliance Industries Ltd and its Canadian partner Niko Resources will invest over $2 billion in bringing to production their gigantic gas field in the Bay of Bengal and laying pipelines to transport the fuel.
"We will invest one billion dollar in staged development of D6 deep-water gas reserves (off the Andhra coast) and in excess of a billion dollar in building pipelines," Niko Resources executive chairman Edward S Sampson said in New Delhi on Tuesday. "We anticipate the work to start by early 2005," he said.
Of the 11 discoveries (from 12 wells) on the D6 block, Reliance has declared commerciality of Dhirubhai-I, II and III. Of these, Dhirubhai I and III are being developed first.
According to Reliance, which claims ultimate resource potential of 14.5 tcf in D6 block, Dhirubhai-I contains 4.1 tcf of reserves and with Dhirubhai-3 it can produce 40 million standard cubic meters per day of gas. Dhirubhai-3 holds 3.5 tcf of reserves while Dhirubhai-2 has 0.16 tcf of reserves.
The fourth discovery, Dhirubhai-4, is estimated to have 1.7 tcf reserves.
Niko, which holds 10 per cent interest in the block, said it expected that D&M's 11 tcf resource figure would increase to 14 tcf over time through ongoing analysis, drilling and testing. A 2500-sq km 3D seismic survey is being carried out over block D6.
"The drilling so far had been based on the first 1800 sq km seismic survey. The second seismic survey will be integrated with the first to arrive at the next phase of drilling," Sampson said.
Reliance has hired Norwegian contractor Aker Kvaerner to undertake concept definition studies and has completed front-end engineering and design work for development of Dhirubhai-1 and 3 fields.
The first phase of the project will feature subsea wells in shallower depths feeding gas into a large header. From there gas will be piped about 20 kms to shore and overland to a new processing plant near Kakinada in Andhra Pradesh.
From Kakinada, Reliance will build a 48-inch pipeline for transporting gas to other big markets, such as the Mumbai and Gujarat region and New Delhi area.