Contrary to the Petroleum Ministry’s claim, its monitoring agency Directorate General of Hydrocarbons says the first gas output from Reliance Industries Ltd’s Krishna-Godavari Block may get delayed to early next year though crude oil from the block could flow this month. “In the best possible scenario, gas production may commence end of November 2008. However, since the left-out activities are mainly dependent on weather conditions, local resource supply, long loop system integration etc, in the worst case, it may be further delayed by 1-2 months depending on the nature of associated problem,” says a September 10 DGH report.

Earlier this month, Petroleum Secretary RS Pandey said RIL would start pumping gas from Block KG-DWN-98/3 by end-October although initially, the government had claimed that the field would start producing in July. Reliance, however, maintains a large time window with production targeted for the second half of this year.

India is banking on this gas to cover the shortfall between demand of 180 MSCMD and supply of 95 MSCMD (million standard cubic metres per day).

“Initial rate of gas production from D1 and D3 (wells) may be in the range of 15 MSCMD on a build-up and may be gradually ramped up after putting the wells with 7" x-mas tree on production,” says the DGH report to the ministry. Reliance has been saying that supply would be pushed to 40 MSCMD by March 2009 with peak output of 80 MSCMD by 2010.

As for crude oil, the DGH assessment is that first volume of up to 20,000 barrels per day is feasible from this month. “It seems feasible that the pre-commissioning activities will be completed soon and oil production may commence sometime in September 2008.”