Reliance, BP seek buyers for natural gas from KG-D6 block offshore India

Reliance Industries and its partner BP are seeking buyers for natural gas produced from the KG-D6 block located in the Krishna-Godavari basin of the Bay of Bengal on the eastern coast of India.

Covering an area of 8,100km², the block is owned and operator by Reliance Industries with 66.6% stake while BP owns the remaining 33.3% interest.

The KG-D6 Block integrated development project involves the development of three new deepwater fields, namely R-Cluster, Satellites Cluster and MJ.

Reliance intends to sell 5.5 million standard cubic meters per day of additional natural gas produced from the eastern offshore KG-D6 block, reported Press Trust of India (PTI).

As per the tender document, the partners plan to start gas supply from late April or early May while the e-auction is scheduled for 23 April 2021.

The lowest bid and highest acceptable bid would be minus $0.3 per million British thermal unit and JKM plus $2.01 per Metric Million British Thermal Unit (mmBtu) respectively.

Over a supply tenure of three to five years, the bidders can seek minimum supply volume of 0.01 mmscmd with maximum being the full offer volume.

Although the lowest price for the gas offered by RIL-BP has a current price of around $6.5 per mmBtu, the selected bidders will be entitled to a $3.62 per mmBtu maximum ceiling for six-month period to 30 September 2021, as fixed by the Indian government.

By 2023, the total gas production from the three fields is expected to reach one billion cubic feet a day (bcfd).