INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS...

RIL TO INVEST $6 B IN KG, SEES GAS OUTPUT IN 2 YRS

 RELIANCE Industries (RIL) is looking at gas production from the KG Basin in Andhra Pradesh by the middle of 2008. In line with this, the company has initiated development at KG basin D6 to support the production process. The company is looking at investments in the region of $6 billion to $7 billion in the KG Basin over the next two-three years.

It is looking at gas production of up to 40 mmscmd by mid-2008. Addressing a seminar on natural gas, Reliance Industries president (gas business) R P Sharma said, the company had already initiated work on a 1,400 km pipeline between Kakinada and Ahmedabad to evacuate the gas. In fact, it has already identified ready to use pipes of 48-inch diameter for the setting up of the pipeline.

Elaborating on the gas capacity, he said, typically 40 mmscmd of gas could generate 10,000 mw of power, 20 mt of urea and electrify 40-50 townships. While the initial production capacity could be easily absorbed by the existing gas shortfall, there was need to identify areas for new and unmet demand. Mr Sharma suggested development of city distribution networks, fiscal incentives for gas usage, gas-based industrial parks and a declared goods status for natgas as ways to boost consumption.

Mr Sharma also proposed infrastructure support in the form of quality roads to move huge equipment, port handling and airport facilities. Calling KG Basin the hub of energy for India, he said, Reliance was the largest private sector player in the exploration and production of gas in the basin.