New Delhi: Reliance Industries will defer investments in developing newer fields like R-Cluster in KG-D6 block if the government does not hike gas prices to make them economically viable to produce.
RIL’s Dhirubhai-34, or R-Cluster field, in the flagging KG-D6 block was to produce about 13 million standard cubic metres of gas per day, equivalent to present day output from D1 and D3 as well as MA fields, by 2017-18. Its minority partner Niko Resources said the KG-D6 consortium believes the government has “contravened the terms of production sharing contract” by not raising gas prices on the due date of April 1.
“If the expected new price for natural gas sales from the D6 Block in India is not notified by the Government, then a significant portion of the contractor group’s planned investments in the block are expected to be deferred,” it said.
The new government had last week deferred raising natural gas rates by three months pending comprehensive consultation on a new pricing formula that was approved by the previous government. The $4.2 per million British thermal unit rate set in 2007 for five years of production from KG-D6 block expired on March 31.
RIL and its partners, BP plc and Niko have been pressing for revision as KG-D6 block is unviable for production at current price....