Reliance To Start Gas Production From MJ Field, Tie Up With BP

India's largest oil producer Reliance Industries Ltd will start natural gas production in this quarter from MJ field, discovered in the KG-D6 block. It will be able to cater to India's 15 per cent gas demand as per PTI report.

MJ field is situated deep within the terrains of KG- D6 block off the Andhra coast in India, the only deepwater block under production. MJ is spotted between the depths of 600 and 1,200 metres underwater and is linked to seven production wells to be linked to the Floating Production Storage and Offloading (FPSO) via a pair of subsea drill centres.

MJ's reservoirs are about 2,000 metres below the producing D1-D3 gas fields and the development is expected to be the third largest on the block. Reliance holds a 66.67 per cent operated interest in KG-D6, with BP holding the remaining 33.33 per cent.

The average production of KG-D6 block was 20 million standard cubic meters per day in the January-March quarter, the company stated in an investor presentation filed on the securities exchange.

Reliance and its partner, UK supermajor BP (formerly British Petroleum) are now on the verge of commencing production operations from MJ, its giant deep water project. It will significantly boost gas output from the prized east coast asset. "MJ field is expected to commence production in 1Q FY24 (April 2023 to March 2024)," it said.

The company had earlier planned to commence the project operations from December quarter, however it got delayed by further three months. Reliance and BP are spending about $5 billion on further developing KG-D6 through three different projects, aimed at rejuvenating gas production from the offshore asset.

While the first two developments - R-cluster and Satellite Cluster - have started gas production, MJ is now nearing completion. Once fully operational, MJ will increase KG-D6 gas production to 30 mmscmd in FY24.

In a presentation, Reliance said, "Testing and commissioning underway in the MJ field. One well opened as part of the ongoing testing of the integrated production system." The company has already sold 6 mmscmd of gas to companies in the city gas, power and fertiliser sectors.

Reliance and BP plan to use a floating production system at high-sea in the Bay of Bengal to go deeper in exploring and discovering while producing gas in KG-D6 block.

The MJ-1 gas field is situated 2,000 metre below the Dhirubhai-1 and 3 (D1 & D3) fields - the first and the largest fields in KG-D6 block. MJ-1 is estimated to hold a minimum of 0.988 trillion cubic feet of contingent resources. The field also has identified oil deposits. Both gas and oil will be drilled from below seabed to the FPSO, where they will be stripped of impurities.

Oil will be loaded on tankers for sale to refineries while gas will travel to onshore through an under-sea pipeline and onwards to customers. South Korea's Samsung Heavy Industries-built double-hulled FPSO is built to handle 60,000 barrels per day of liquids and around 12.7 million cubic metre per day of gas.

The floater is expected to have condensate production capacity of 30,000 bpd and water-handling capacity of at least 20,000 bpd, with the potential for the latter to be increased.

R-Cluster started production in December 2020 and the Satellite Cluster came on stream in April next year. While R-Cluster is expected to reach plateau gas production of about 12.9 mmscmd in 2021, Satellite Cluster will have a peak output of 6 mmscmd.

The MJ field will have a peak output of 12 mmscmd. Oil-to-telecom conglomerate Reliance has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 - the largest among the lot - were brought into production from April 2009 and MA, the only oilfield in the block, was put to production in September 2008.

While the MA field has stopped producing in 2019, the output from D-1 and D-3 ceased in February 2020. Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.