India's Reliance Industries Ltd will finalise sales agreements in the next few months for natural gas from its deep sea fields off the country's east coast, a senior official said on Saturday.
"We are in the process of price discovery right now and hope to sign agreements in the next 2-3 months," said P.M.S. Prasad, head of Reliance's oil and gas business.
Reliance, India's top private oil refiner and petrochemical maker, is developing two deep-sea gas fields in India's Krishna Godavari basin, off the southern state of Andhra Pradesh, and aims to produce 80 million cubic meters of gas a day (mmscmd) by mid 2008. Prasad said the company would initially produce 40 to 50 mmscmd, using up to 15 mmscmd of this for its own plants, at its refinery in the western state of Gujarat.
Reliance, through an associate firm, is constructing about 10,000 km (6,200 miles) of pipeline infrastructure to transport its gas from its fields to the western and southern regions.
"About 250-300 billion rupees ($6-7 billion) is required from Reliance to set up these pipelines, of which we have already invested 170 billion rupees in the east-west pipeline," Prasad said at a press conference. He said the company was in talks with several fertiliser and power firms to sell its gas.
"I can't tell you their profile, but the government wants us to fill the existing shortfall and supply gas to fertilisers and power and then to other heavy industries," he said.
Reliance is also planning to supply gas through distribution projects in cities across five Indian states -- Tamil Nadu and Karnataka in the south, Maharashtra and Gujarat in the west and West Bengal in the east. Reliance has 83 percent of its exploration acreage in deepwater areas and is planning to spend $5.2 billion on developing the two fields. The company has signed development contracts worth $4.5 billion.