Reliance confident of KG gas supply by June 2008

Vol 9, PW 23 (09 Mar 06) Midstream & Downstream

Contractors are cynical but Reliance is confident it can deliver first gas to shore from its Dhirubhai discoveries in the Krishna Godavari basin by the oil ministry deadline of June 2008.

We are 100% confident and are doing our best to meet the deadline, reveals a source. We have review meetings every month with the DGH to monitor progress.

Reliance chairman Mukesh Ambani is also reported to be directly overseeing the project, with regular weekly meetings within the company to review progress. DGH officials are convinced and confirm that Reliance will deliver first gas by June 2008.

In one recent meeting, Reliance said it is proceeding with development work at the block and is dredging the sea in preparation for laying the shallow water pipelines to bring gas to a proposed onshore terminal at Gadimoga village, some 30-km south of Kakinada, where work is already underway. Poor contractor response to Reliances tender for turnkey development of the D6 development has forced the company to divide work into three segments: 1) installation of sub sea controls and the Christmas Tree 2) connecting the manifolds 3) laying the offshore pipelines to transport the gas to shore.

Contractors have already begun laying a pipeline in shallow waters. Reliance is set to award contracts for the other development work by the end of this month.

Meetings are underway on a regular basis with global suppliers and Reliance has hired several foreign consultants to help with the development programme. Still, some contractors are sceptical about the June 2008 target for first gas delivery.

They tell us it will take a minimum 36 months from the start date of any construction for offshore and onshore facilities before first gas can reach shore, i.e.

not before the third quarter of 2009. One possible explanation for the 12-month discrepancy is that Reliance believes the high pressure of the reservoir will enable it to initially pump first gas to shore without a compressor, which it will build later.

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