Reliance expects further increase in Indian gas prices
Mumbai-based Reliance Industries said on May 7 that it expects the price for its KG-D6 gas to rise over the current $9.92/mn Btu in the October 1, 2022-March 31, 2023 period or the second half of the Indian fiscal year.
“Now, going forward, we expect ceiling prices to increase to $9.92 in the first half - that has been notified. And further, we expect increases going from there onwards in the second half of the year,” Sanjay Roy, senior vice president (exploration and production), said on an analyst call.
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India more than doubled the regulated wholesale prices of locally produced natural gas with effect from April 1. For April 1, 2022 to September 30, 2022 period, the price paid to most domestic natural gas producers will be $6.1/mn Btu, up from $2.9/mn Btu during October 1, 2021-March 31, 2022 period. The price of locally-produced gas is set every six months through a formula linked to global rates.
The Indian government also notified an increase in the natural gas prices from difficult-to-exploit fields such as deepwater, ultra-deepwater and high pressure-high temperature to $9.92/mn Btu from $6.13/mn Btu.
Reliance and partner BP are developing three deepwater gas projects at KG D6 – R Cluster, Satellites Cluster and MJ. These projects will utilise the existing hub infrastructure in KG D6 block. RIL is the operator with a 66.67% participating interest and BP holds a 33.33% participating interest. Reliance is currently producing about 20% of India's total domestic production and is working on increasing this to up to 30%, Roy said.
The R Cluster came online in 2020 while the Satellite Cluster started production in April last year. The first gas from the MJ field is expected during the October-December quarter of 2022. Peak gas production from the three fields is expected to be around 30mn m3/d by 2023, according to Reliance.