BP and Reliance Industries start production from second phase of India's largest offshore project

The Krishna-Godavari field development will contribute towards meeting 15% of India's overall gas demand

FILE PHOTO: A man walks past a Reliance Industries Limited sign board installed on a road divider in the western Indian city of Gandhinagar January 17, 2014. REUTERS/Amit Dave/File Photo
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Reliance Industries, India's largest private sector company controlled by its richest man Mukesh Ambani, and BP have started production from a new field in the country's largest offshore deepwater gas block.

The project, which lies offshore in the Bay of Bengal to the east of the Indian subcontinent, takes its name from the basin of the Krishna and Godavari rivers in the southeastern state of Andhra Pradhesh.

The second satellite cluster development in the Krishna Godavari Dhirubhai 6 (KG-D6) block will boost overall gas production from the project to 1 billion cubic feet per day by 2023. Reliance holds the majority stake with 66.67 per cent interest, with BP accounting for the remaining share.

The overall field development will contribute towards meeting 15 per cent of India's total gas demand. The country's share of natural gas in the energy mix is one of the lowest in the world at 6 per cent, according to the International Energy Agency (IEA).

South Asia's largest economy, has a growing demand for energy, with the government prioritising gas, as a cleaner fuel to the more polluting coal that India burns to produce power. India will overtake the European Union as the world's third-largest energy consumer by 2030, according to the IEA. The country is also the world's third largest consumer of oil.

India has plans to phase out its coal power plants, which are blamed for record-high levels of pollution in cities such as the capital New Delhi.

The government has ambitions of quadrupling its renewable energy capacity and doubling the share of natural gas in its energy mix to generate cleaner power.

The Krishna-Godavari offshore project has been prioritised to meet some of India's demand for gas, domestically.

The latest development will utilise the existing hub infrastructure available for the first phase of the project.

The start-up of production from the satellite cluster within the Krishna-Godavari field is two months ahead of schedule, the Indian company said.

A third development, MJ, which is associated with the gas field, is expected to come on-stream in the latter half of 2022.