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India's D6 gas production to commence September

India's giant D6 gas block in the eastern offshore Krishna Godavari Basin is expected to start production in September at a rate of 25 million cu m/day (about 882,500 Mcf/day) and supplies will be prioritized for the country's underutilized urea and power plants, the oil ministry said late June 25.

This is the first time the start-up schedule has been officially narrowed down to a month. Production would gradually ramp up to 40 million cu m/day (about 1.4 Bcf/day) by March 2009, the ministry said.

Existing gas-based urea plants would be supplied gas from D6 to reach full capacity utilization as the highest priority.

The deepwater block off India's east coast is operated by private oil and petrochemicals giant Reliance Industries Limited, which holds a 90% stake. RIL is partnered by Canadian Niko Resources, which has 10% equity.

RIL had until now talked about the start of production using a broader timeframe of October 2008 to March 2009. Niko said June 25 it would be the third quarter of 2008.

Output from the block's two fields that are being developed in the first phase -- Dhirubhai 1 and Dhirubhai 3 -- is envisaged to hit the planned peak rate of 2.8 Bcf/day within the first year of production, Niko said in a report June 25 on its quarterly and fiscal 2007-08 financial results.

Urea and power plants get priority

Meanwhile, a special ministerial group set up by the government to study commercial gas utilization in India in view of the expected increase in supply from domestic fields and imported LNG in the coming years has decided that the government shall decide the marketing priorities and the price formula.

The special ministerial group, which met on May 28, mapped out an allocation of the D6 gas, giving priority to the country's underutilized urea plants and power plants, the oil ministry said in a statement.

Existing gas-based urea plants would be supplied gas from D6 to reach full capacity utilization as the highest priority, the ministers decided.

A maximum of 3 million cu m/day will be supplied to existing gas-based LPG plants.

The next group in the priority list is gas-based power plants lying idle or under-utilized and likely to be commissioned during fiscal 2008-09 (April-March), and power plants currently running on liquid fuel, which could switch to natural gas.

Up to 18 million cu m/day of D6 gas has been allocated to meet the "partial requirements" of this category of consumers.

A maximum of 5 million cu m/day would be made available to city gas distribution projects that supply piped natural gas to households and compressed natural gas for the transport sector.

Any additional gas available would be supplied to existing gas-based power plants, "as their requirement is more than 18 million cu m/day," the ministerial group decided.

Next page: Cross-country pipeline ready

Created: June 26, 2008

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