KG-D6 supplies in a mess: Gas production drops to 50 MMSCMD

It is now quite clear that RIL will not be able to achieve its target rate of production of 80 MMSCMD (million cubic meters per day) in the KG-D6 block any time in the near future. As further testament to this, the company's production of natural gas dropped to 50 MMSCMD during the week ended December 26, 2010. This is far below the allocations of over 63 MMSCMD of KG-D6 gas made by the EGoM to various customers in the priority sectors. The increasing supply deficit, if not corrected, will cause a major upset in the economics of the gas market, since KG-D6 is by far the biggest source of natural gas in the country. Following are the highlights on production from this block, as of December 27, 2010.

• Gas production: Average gas production at the KG-D6 block ranged between 50-52 MMSCMD over December 20 to December 26, 2010. Out of this, the D1 and D3 fields in the block produced 42-44 MMSCMD of gas, while the MA field accounted for the remaining 8 MMSCMD.
• The number of wells put on production during the week ended December 26, 2010, remained at 16. No additional wells have been drilled by RIL at the block as yet, and the total number of completed wells remained four short of the target of 22.
• Gas sales: As on December 26, 2010, RIL was selling around 52 MMSCMD of gas from this field, out of which 14 MMSCMD was going to fertiliser plants, 26 MMSCMD to power plants and the remaining 12 MMSCMD was being consumed by low-priority sectors such as sponge iron plants, LPG, city gas distribution, refineries and the RGTIL line for system use gas.
• RIL has tried to cover up the shortage in supplies by saying that the drop to 50 MMSCMD was only temporary and had occurred due to a shutdown of RGTIL's gas compressor for maintenance. The facility is said to have been repaired since then. However, RIL itself admitted that gas sales would not go above the 52 MMSCMD mark in the near future.
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  Production from MA field: Around 8 MMSCMD of associated rich gas was transported to the onshore terminal and subsequently mixed with D1 and D3 lean gas after removing condensate. Condensate production at the onshore terminal was also lower, occurring at in the range of 2,000 to 2,300 barrels per day.