Reliance Industries plans to invest USD 6.5 billion in its KG-D6 gas fields to re-attain natural gas production of up to 60 mmscmd by 2019-20 and regain the lost glory of the prolific block.

"We can attain a production level of 40 to 60 million standard cubic meters per day (mmscmd) by 2019-20 provided we get timely approvals and the right natural gas price," RIL President & Chief Operating Officer (E&P) B Ganguly told PTI.

The Bay of Bengal KG-D6 fields, which began gas production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress led to shutting down of more than one-third of the wells. Current output is just over 14 mmscmd.

While the company carries out remedial measures to augment production from the currently producing Dhirubhai-1 & 3 (D1&D3) and MA fields, it plans to invest USD 3.155 billion in producing 20 mmscmd of gas from R-Series discoveries in the block and another USD 1.529 billion in four satellite fields to produce 10 mmscmd.

Another USD 1.2 billion is planned to be invested in other discoveries in the block, he said.

The company will invest USD 747 million in augmenting production from D1&D3 and MA fields by putting up booster compressor and repair work at the closed wells.

Besides USD 6.451 billion, another USD 6.151 billion is expected to be spent as operating expenses, he said.

These investments were besides the USD 7.572 billion the company has already sunk in development of D1&D3 and MA fields, USD 1.261 billion of operating expenses and USD 1.094 billion in exploring for oil and gas in the block.

Ganguly said such large investments were viable at no less than USD 7.5 per million British thermal unit gas price after considering the cost of capital and royalty paid to the government on production.

"First gas from the satellite developments is expected in mid-2017-18," he said adding the company has not made investment or production projections of the giant MJ1 discovery made 2-km below D1&D3 field recently.

MJ1 may hold 2-3 trillion cubic feet of reserves, almost equal to reserves in D1&D3 fields.

RIL says MJ1 and most of the other discoveries in the KG-D6 block were uneconomical to develop at the current USD 4.2 per mmBtu price.

It is drawing comfort for the future investments from the government approval of the Rangarajan formula for pricing of gas according to which the rate in April 2014 would be USD 8.2-8.4.

"The key to these developments is timely approvals and gas price. If we don't get the right price, the gas will remain in the ground," he added.