12-06-08 Reliance Industries Ltd (RIL) will start selling natural gas in the country this year at $ 25.20 per barrel of oil equivalent -- an 80-% discount to global prices of over $ 135 -- helping the country reduce imports at record prices.
The Krishna-Godavari (KG) basin gas field will produce 80 mm cm of gas a day, saving the country over Rs 114,000 crore ($ 27 bn) in annual import bill, chairman Mukesh Ambani told shareholders.

Reliance will also commission a transmission system for natural gas from the KG basin, off the eastern coast. The soaring cost of exploration and a cap on gas prices may, however, cut Reliance's profit margins. The government has ordered Reliance to sell natural gas from the KG field for $ 4.2 per mm Btu, less than the $ 4.5 it had sought.
Reliance aims to produce 240-350 mm cf of gas a day from the MA-1 field from the second half of the 2008-09 fiscal year, when gas production from two other fields in the block, D1 and D3, will also begin.

Reliance Gas Transportation Infrastructure is setting up an East-West gas pipeline system to connect the country's cities for distribution of gas from the KG basin. Reliance Industries, which is investing $ 5.2 bn to develop the KG basin oil and gas fields, the nation's largest, expects to more than double gas output in the country.
Reliance is also aiming to start oil production from its D-6 block in the KG basin in July-August, by the time it commissions its second refinery in Jamnagar, Gujarat. Commissioning of the 580,000-bpd refinery will increase Reliance's crude processing capacity to 1.24 mm bpd, equivalent to about 2 % of global capacity, Ambani said. The new refinery is being built adjacent to Reliance's 660,000-bpd plant at Jamnagar and the combined facility will be the world's biggest.

Reliance would produce sweet oil with an API density of 43 degrees from two or three wells to meet initial targeted output of 20,000 bpd and has already started inviting bids for sale of the crude. The country currently imports 70 % of its crude oil requirements and doesn't produce enough gas to meet local demand.
Reliance, meanwhile, reported over Rs 15,000 crore in net profit for the year-ended March 2008. Reliance, which enjoys a global market share of 7 % in the polyester fibre and yarn business, plans to further consolidate its global leadership in polyester with the new 2.5 mm tpy paraxylene manufacturing facility at Jamnagar.