BEIJING, March 19 -- Reliance Industries Ltd, India's biggest company by market value, said it has signed contracts worth 4.5 billion U.S. dollars to develop gas fields off India's southeast coast to meet its production targets.

    The spending will be part of 5.2 billion U.S. dollars of investment the company plans for the area, P.M.S. Prasad, the company's president for oil and gas, told reporters at the weekend in a briefing in Rajamundry, the port city in southern India near its fields. Gas production will start on schedule in 2008, he said.

    "Investment has already been committed to ensure that all suppliers meet their deadlines, which will enable us to start gas production on target in 2008," Prasad said.

    Commercially viable deposits in the fields may help Reliance meet India's growing requirements for gas for power plants and fertilizer. India, Asia's third-biggest oil market, is promoting exploration to reduce dependence on imports as prices rise to records and output fall from aging fields. India's current gas supply of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the Oil Ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of seven percent to eight percent a year, Bloomberg News said.

    Reliance plans to build a 1,400-kilometer pipeline to supply gas to the state of Gujarat in the nation's west, passing the country's business capital, Mumbai. Gujarat is home to petrochemical, fertilizer and cement companies. The pipeline will be built by Reliance Gas Transportation Ltd.

    Reliance Industries aims to borrow 2 billion U.S. dollars from overseas banks and investors and will meet the rest out of its internal resources, Prasad said. It will spend 800 million U.S. dollars to build a gas processing plant at the eastern port town of Kakinada.

    Reliance Industries, owner of India's biggest refinery, said on November 1 the gas field off the country's east coast will produce twice the quantity previously estimated. The field, discovered in 2002, will probably produce 80 million cubic meters a day, against an initial estimate of 40 million cubic meters, the company said.

    The gas field, which will start producing in June 2008, will reach a peak production of 80 million cubic meters a day, Prasad said. Of this, the firm will use 25 million cubic meters a day for its own power and chemical plants.

    The company doesn't plan to spin off its oil and gas business into a separate outfit, Prasad said. "Reliance will remain an oil, gas and refining company," he said.

    The company also doesn't plan to seek a foreign partner for the oil and gas segments, Prassad said.

    (Source: Shanghai Daily)