RIL picks up 40% stake in US gas project for $1.7 b

RIL picks up 40% stake in US gas project for $1.7 b

The investment would be scaled up to $3.5 billion over the next 10 years, RIL Chief Financial Officer Alok Agarwal said.Reliance will take 40 per cent stake in the about 3,00,000 acres while Atlas will hold the remaining 60 per cent and also the operatorship. Marcellus shale gas project, which spans parts of Pennsylvania, West Virginia and New York and could hold enough natural gas to satisfy US demand for a decade.

RIL had earlier unsuccessfully bid for acquiring controlling stake in bankrupt chemical maker LyondellBassel. It bid $14.5 billion for Lyondell but the offer was vetoed by creditors who filed a rival revival plan. Flush with revenues from its eastern offshore KG-D6 gas field back home, the Mukesh Ambani-run firm has been on the lookout of acquisitions in the US. Separately, its twin refineries at Jamnagar in Gujarat are looking at directly selling fuel into the US.

“Reliance Marcellus LLC, a subsidiary of RIL has executed definitive agreements to enter into a joint venture with US based Atlas Energy under which Reliance will acquire a 40 per cent interest in Atlas’ core Marcellus Shale acreage position,” the company said in a statement. The Indian firm will pay $339 million in cash to close the deal and foot Atlas’ drilling cost of up to $1.36 billion.

New gas find
Meanwhile RIL has informed oil regulator Directorate General of Hydrocarbons (DGH) that four smaller gas finds surrounding the D-1 and D-3 fields in the Krishna-Godavari basin can be commercially exploited.

The company estimates that four smaller gas finds in the prolific KG-D6 block may contain 1-2 Trillion cubic feet of reserves and may help prolong peak output of 80 million standard cubic meters per day (mmscmd) from the block, sources said. Once DGH approves commerciality, RIL will submit a detailed development plan, detailing investment and production potential.