The Hindu Business Line : ‘$12-b K-G basin gas, pipeline project on track’

The complex offshore work has made significant progress and would be ready quite ahead of schedule. — Mr P.M.S. Prasad, President, Oil & Gas, Reliance

V. Rishi Kumar

Hyderabad, Jan. 17

There has been much anticipation over Reliance Industries’ oil and gas evacuation project from the deep sea bed of the Krishna-Godavari Basin. The project has the potential of changing the economy of not just the region but also turn around gas-starved power projects and fertiliser units along its pipeline grid. The project will see a $12 billion investment (about Rs 48,000 crore) by the end of 2008-09.

For Mr P.M.S. Prasad, President of Oil and Gas at Reliance, this is a test of not only gigantic project execution skills but also keeping the Reliance record of completing projects within deadlines.

In a conversation with Business Line, Mr Prasad spoke about the way ahead and assured that the gas would be delivered by July 2008 as promised.

But he cautioned that there is still a lot of untraversed territory..

Mr Prasad said “all is not yet done. Just watch out.” Excerpts from the interview:

You are barely six months away from actually delivering the gas to end users. How is the project’s progress?

There are different elements to the project execution. One is the under-seabed equipment, the other on-the-sea platform and lastly the processing facility off the coast. To this is the fourth element, the pipeline grid that would help evacuate gas to various parts of the country.

We are in the process of building a platform under-seabed, pipelines, electrical cables and related infrastructure installations, all under the sea about 4,000 feet of water depth. The platform on the surface is under way so is the work related to onshore for processing.

The complex offshore work has made significant progress and would be ready quite ahead of schedule.

Sub Sea work must be hostile?

To execute the project faster, we decided to place vessels and manpower in November itself. However, there is something called the undersea current and congenial time for work on such projects. Typically, most such projects get executed during December to April. In spite of our efforts to compress time, work could only commence when the conditions were conducive.

Can you provide some idea about the number of people and vessels pressed into service?

There are about 72 plus vessels working near the coast with 1000s of them on board. Most of the people working on these vessels are off the coast for nearly 15 to 21 days. These vessels are supported by about 10,000 people. Most of the work is in deep waters at about 40 to 60 km offshore. And the platform would be placed at about 20 km away from shore. To this, add another 3,000 men who are working on offshore part. In all, the overall number of workers is about 15,000. A project like this is quite challenging. What about equipment supplies?

The necessary equipment is being fabricated near the site and also in 16 countries across the world. These supplies need to perfectly fit the small weather window. The work is apace in all locations. However, when there were some concerns about gas pricing, some of the equipment suppliers decided to go slow, to meet their other commitments. But they are now back at them.

Given this backdrop, are you certain that you would be able to supply gas by July 2008?

Yes. We have a long way to go in terms of overall project execution. There are host of elements including weather conditions, supply of project equipment etc. However, we believe that we would be able to achieve both gas production and evacuation and supplies as per plans.

Is the pipeline work under way?

The work on synchronising pipeline grid for the project is being done at a hectic pace. Since this is onshore, we believe that this would be ready by April-May itself with a clear gap of about 6 weeks for project commissioning. About 1,500 km pipeline link would be ready.

So, how much are you investing in KG Basin and pipeline grid?

To develop oil and gas business, we are investing about $7.5-8 billion and $4 billion in pipeline. Together, this could be about $11.5-12 billion by the end of 2008-2009. This is currently being funded through internal accruals and other institutional sources. Have you firmed up with IPPs and fertiliser units for gas supplies?

We have indicated that those whose projects are unable to generate power due to shortage would be supplied gas first along with fertiliser units, the latter is part of the Central Government interest. We would comply with this as it is a national priority.