Experts highlight that this has the potential to revive the ailing fertiliser segment in the country by competing with the re-gasified liquid natural gas (RLNG), as the difference between RLNG and domestic deepwater gas would be at least 25-30 per cent by then. "By 2022, India is expected to have an overall demand of gas to around 350 million metric standard cubic meter per day (mmscmd), of this we are going to supply around 35 mmscmd once the new discoveries start production," Mukundan told Business Standard.

The three projects in the Block KG D6 integrated development plan include R-Series, satellite cluster and MJ (D55), which the companies expect will revive the fortunes of the block. “The first to start production will be R-series in 2020, followed by satellite cluster in 2021 and MJ in 2022,” he said. The three projects put together have around 3 trillion cubic feet of discovered gas resources, where the companies are investing around Rs 400 billion. The firms have already placed contracts to the tune of around $2 billion.

At present, fertiliser sector consumes about 40 mmscmd, of which around 50 per cent is met through the allocation of Administered Pricing Mechanism (APM) gas supplies, while the remaining is met through RLNG. By 2022, industry expects the fertiliser demands to zoom to 60 mmscmd. If KG-basin gas gets successful in replacing RLNG, it may save at least $3.42 per million metric British thermal unit based on the current pricing.

Domestic natural gas in India is priced around $3.06 per mmBtu, while for deepwater gas, it has a ceiling of $6.78 per mmBtu. If KG-gas can replace LNG by then, it may lead to a savings of around $1 billion per annum for the sector.

“Increased domestic production of gas will certainly help in increasing consumption and deepening the gas market, as it is expected to be 25-30 per cent cheaper than RLNG. Fertiliser, city gas distribution and petrochemical sectors are poised for robust growth in consumption, once the national gas grid and the gas hub is in place,” said Debasish Mishra, partner and leader for energy, resources and industrials at Deloitte Touche Tohmatsu in India. At present, RLNG accounts to around 54 per cent of the total gas consumption.

In KG-D6 Block, RIL has a participating interest of 60 per cent, BP has around 30 per cent, while the remaining

10 per cent is owned by Niko Resources. BP took over 30 per cent stake in multiple oil and gas blocks in India operated by RIL way back in 2011. Since then, the two companies have invested around Rs 130 billion ($2 billion) in deep-water exploration and production to date.