RIL targets 60 million cubic metres of gas output per day

This is likely to disappoint investors: Reliance Industries aims to produce 60 million standard cubic meters a day (mmscmd) of gas in three to four years, chairman and MD Mukesh Ambani said at the annual general meeting on Thursday. Last month, RIL had reported that its output had fallen to 32.66 mmscmd from a peak of 61.8 mmscmd in March 2010.

Clearly, there is no going back to the exuberant 80 mmscmd predicted a few years earlier.

[caption id=“attachment_335520” align=“alignleft” width=“380” caption=“The company is planning to build the world’s largest gassification project. Reuters”]  [/caption]

Ambani said while the KG-D6 gas field still remains India’s first and only deep water development project, getting gas from this field has been more difficult than anticipated. But RIL and British Petroleum are working together to chalk out a development campaign. They are also creating a pipeline of projects for the “next wave of oil and gas development” and hoped that the government would grant the required approvals for the projects.

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“Our domestic oil and gas portfolio remains a key strategic asset for Reliance, its partners and India,” he said in his speech.

Speaking about the company’s investments in shale gas, which he called a ‘game-changer’ for the energy industry, Ambani said the company had invested $3.5 billion across these ventures. Net sales from all these joint ventures are expected to increase ten-fold to 30 billion cubic feet in five years.

“The shale gas business will soon become a significant part of our exploration and production portfolio and is a major area of investment over the next three to five years,” he said. He also said the company was working with its partners to accelerate earnings and achieve “top quartile return on capital”.

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On the petroleum refining and marketing business, the chairman said things had not been easy over the past year due to upheavals in the Middle east, an earthquake in Japan and the European debt crisis.

It refined 67.6 millon tonnes of crude during the year and achieved a gross refining margin of $8 per barrel.

The company is planning to build the world’s largest gassification project, which is expected to add 30-40 percent to the Jamnagar’s complex refining margins in the next three years.

In the petrochemical segment, RIL’s current capacity stands at 15 million tonnes spread over 10 manufacturing locations. Among its various expansions are plans to expand PTA capacity to 4.3 million tonnes and expand polyester portfolio by 1.5 million tonnes, Ambani said.

Overall, the expansion will increase RIL’s petrochemicals capacity from the current 15 million tonnes to 25 million tonnes. “Our aspiration is to be among the five largest and most profitable petrochemicals producers globally with a diversified portfolio focused on the Indian market,” Ambani said.