About: Krishna Godavari basin
- The delta plain formed by Krishna and Godavari rivers in the state of Andhra Pradesh and the adjoining areas of Bay of Bengal is known as Krishna Godavari Basin.
- It is a proven hydrocarbon reserve, with an inland part that covers an area of 28,000 sq. km and an offshore (located in the sea or near the coast) part that covers an area of 2 lakh sq. km.
- Several oil and gas fields are located both on land and offshore parts of the basin.
- The region is primarily known for the D-6 block where Reliance Industries discovered the biggest natural gas reserves in India.
- Reliance Industries Ltd (RIL) and British Petroleum (BP) have announced the start of gas production from R cluster in the Krishna Godavari D6 (KG-D6) block.
- Located at a depth of more than two kilometres, the R Cluster is the deepest offshore gas field in Asia.
- R Cluster is the first of three deep water gas projects in the KG-D6 block jointly developed by RIL and BP. The other two clusters are Satellites Cluster and MJ.
- Production of gas from the R cluster was expected to start in May 2020 but was delayed due to the impact of the Covid-19 pandemic. The Satellite cluster is expected to start production in 2021.
- RIL has a participating interest of 66.7% in the KG-D6 block and BP has a participating interest of 33.3% in the block.
- In FY20, demand for natural gas in India was around 153 MMSCMD and around half the demand was met through imports.
- Increasing domestic production of natural gas is important to reduce India’s dependence on imports and improve energy security.
- The three clusters mentioned above are a key part of the plan to boost domestic production of natural gas and to increase the share of natural gas in India’s overall energy consumption from 6.2% now to 15% by 2030.
- The three clusters in the Krishna Godavari Basin are expected to produce around 30 MMSCMD (Million standard cubic metres per day) of natural gas or about 15% of India’s projected demand for natural gas by 2023.
- The R cluster field alone is expected to have a peak production of 12.9 MMSCMSD or about 10% of India’s current natural gas output.
Boosted by changes to gas tariff structure:
- Recent changes in the formula for gas transport tariffs acted as additional incentive to Reliance and BP’s investments in these three fields.
- Earlier, the tariff was based on the distance of transportation of gas – the longer the distance, the higher the charge.
- However, the new regulations have a two-zone tariff structure. There will be one tariff for gas transported within 300 kms and another tariff for gas transported beyond 300 kms from the source of the natural gas.
- This will help to make the gas more affordable to customers who are far away from the source of the gas.