Reliance Industries Seeks Government OK For Processes To Up Gas Output -Source
First Published Saturday, 26th May 2012 02:16 pm - © 2012 Dow Jones
MUMBAI -(Dow Jones)- India's Reliance Industries Ltd. (500325.BY) has sought the federal government's approval to implement processes which will help it increase output at its natural gas block in the Krishna Godavari region, a senior official of the company said Saturday.
The company expects to increase output in about two years after receiving the approval, the executive told reporters.
"We agree there has been a decline in output which has primarily happened because of water ingress in the areas," the executive said. The company has sought approvals to carry out procedures like work-overs and side-tracking to overcome the hurdles, he added.
Reliance is faced a decline in output at its D1 and D3 gas finds at the key D6 gas block at Krishna Godavari--which was intended to help it meet India's rising energy needs.
This has also hurt India's gas-based power plants and investment in the sector as banks have become cautious about lending to projects without committed fuel supplies. The nation's steel, petrochemical and refining plants have been forced to import costlier gas.
The executive said D1 and D3 are currently together producing 27 million cubic meters of gas a day.
The executive also said the company has sought an increase in gas prices, as market rates have increased since the time, the price was last fixed at $4.2/mmbtu on April 1, 2009. The price is fixed for five years will be next reviewed on April 1, 2014.
"All we want is that the prices should be linked to the market," the executive said.