Reliance Industries on Monday said its city gas would be cheaper by almost 33 per cent compared to liquefied petroleum gas being supplied by oil PSUs.
"Our gas would cost one-third less of LPG," RIL chairman Mukesh Ambani told reporters on the sidelines of the India Economic Summit in New Delhi.
RIL has applied for city gas distribution licence in 100 cities and is awaiting finalisation of the City Gas Distribution Policy by the government.
The petroleum ministry has given final touches to the policy for laying natural gas pipelines and setting up city gas distribution networks with a view to protecting consumer interest and assuring adequate returns to investors.
Talking about the prolific Krishna-Godavari basin, Ambani said the company has drilled 32-33 wells and has discovered potential gas reserves in almost 25 of them.
"There are large quantities of gas in the KG basin and India is likely to find more natural gas than oil in the future," he said.
Ambani said the expansion programme of the Jamnagar refinery is on track and will be competed by mid-2008. "All our projects are on track and the refinery expansion will be completed by middle of 2008," he said.
He said the company foresees the revenues from its gas business to start contributing in the overall revenues of RIL from the financial year 2009-10.
RIL's 'D6' gas field in Bay of Bengal is estimated to have in-place reserves of 50 trillion cubic feet TCF) and gas production is likely to start by July 2008.
RIL has also revised upwards its estimate of recoverable reserves from Dhirubhai 1 and 3 gas finds to 11.3 TCF from 8.3 TCF submitted in its original development plan.
The Mukesh Ambani-led company, which had submitted its revised plan to upstream regulator directorate general of Hydrocarbons early this month, also said it would begin natural gas production from July 1, 2008.
Initially, gas production would be 40 million standard cubic meters per day (mmscmd). This would be increased to 50 mmscmd by December 2008, to 60 mmscmd by March 1, 2009 and to 80 mmscmd by December 2009.
The life of the field has been estimated at 15 years till 2022-23. After the first 7-8 years, production would decline unless more wells are drilled and new reserves added.
Early this month, RIL had said it will invest $5.2-billion to produce 80 million standard cubic meters per day of gas from the D6 block in Bay of Bengal.
The company had in 2004 proposed an investment of $2.47 billion to produce 40 mmscmd for 7.5 years from discoveries - Dhirubhai 1 and 3 (in the d6 block) - out of a total 34 wells.
Ambani also called for further rationalisation of the tax structure in order to render inclusive growth in the economy.
"We need to ensure that the taxation impact of the petroleum products are alleviated," he said, adding: "There is a need for a new mould of taxation structure as seen in other sectors who have benefited due to low taxation."
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