The 20 trillion cubic feet gas field can provide an output of 80 million standard cubic metres per day by 2010.
"I see production starting from December 2007," Gujarat Chief Minister Narendra Modi said.
He said 85 per cent of the 20 tcf in-place gas reserves announced by GSPC were commercially recoverable. "The field has much more than 20 tcf reserve but I have been very conservative."
A gas platform for 6 to 9 producing wells would be constructed off the Yanam-Kakinada coast with each well producing about 1.5 million standard cubic metres per day (mmscmd) of gas.
The development of the field would require Rs 1,500 crore (Rs 15 billion), which GSPC plans to raise through a mix of internal accruals, debt and an initial public offer, D J Pandian, managing director, GSPC said.
He said GSPC, currently wholly held by Gujarat government, plans to dilute 10-20 per cent of the equity through an IPO in next six to 12 months.
GSPC struck 20 tcf of gas reserves in the third well in the block KG-OSN-2001/3, some 6 km from Andhra coast.
The initial estimates of GSPC find are more than Reliance Industries' 14 tcf find in deep sea in the same Krishna Godavari basin and Oil and Natural Gas Corp's legendary Bassein field, off Mumbai coast, which has 10 tcf of proven reserves.