Co will invest over bn to lay 1,400 km Andhra-Gujarat pipeline

Mumbai, August 5 Oil and gas major Reliance Industries Ltd (RIL) on Saturday announced a -billion investment plan for its oil exploration and production (E&P) business and laying transportation pipelines. According to Subhash C Varma, president, development and production, RIL, “Reliance Industries is likely to invest the amount in next two to three years. The company will invest over billion for laying the 1,400 km East-West pipeline.”

Varma added that the investment also included some of the company’s overseas activities. It intends to invest Rs 23,000 crore in the next one to two years in various oil and gas development projects. “We also plan to create a national gas grid,” he said.

The 1,440-km East-West pipeline project from Kakinada in Andhra Pradesh to Ahmedabad in Gujarat will entail an investment of billion. The project is expected to be completed in June 2008 when RIL is expected to start commercial production of gas from the KG basin. Gas Transmission Infrastructure (RGTIL) is executing the pipeline project for RIL.

Varma said RIL would also participate in the seventh round of auctions of oil and gas blocks under the NELP-VII, which is expected to start in November this year.

Reliance also plans to drill over 100 wells in the next 3-4 years and would procure seven rigs. Of these, six rigs would be in deepwater and one in shallow water. Currently, it has contracted three rigs, of which two are in deepwater and one in mid-water. Twelve supply vessels have been currently contracted to support the drilling operations and the company plans to add two more by next year.

According to a Morgan Stanley report, during the last quarter, RIL spent Rs 3,860 crore in E&P business. Of this, Rs 100 crore was spent on petrochemicals, Rs 2,460 crore on exploration-related capital and Rs 410 crore on the rollout of gas station network.