The Hindu Business Line : Reliance's piped gas to be cheaper than LPG: Mukesh

Cheap fuel
Piped gas would cost one-third less than that of LPG supplied in cylinders.
RIL has applied for gas distribution licence in 100 cities.

New Delhi , Nov. 27

Reliance Industries Ltd said on Monday that the price of the piped gas supplied by it would be cheaper by one-third (33 per cent) of the price of conventional liquefied petroleum gas supplied in cylinders. Reliance plans to lay a network of pipelines to distribute natural gas in cities, which would be a new source of revenue.

Responding to queries on the sidelines of the India Economic Summit 2006 here, Mr Mukesh Ambani, Chairman and Managing Director of RIL, said, "Our gas would cost one-third less than that of LPG." 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, which is working on the policy for laying natural gas pipelines and setting up city distribution networks with a view to protecting consumer interest and assuring adequate returns to investors, is expected to come out with a policy soon.

About the quantum of gas that the company would pump in through the city distribution networks, Mr Ambani said, "As the market grows, consumption will go up and depending on this, we will decide how much gas has to flow."

As regards natural gas business, the country's largest private sector oil and gas player said that it expects this business to `significantly' contribute to its revenues starting 2009, by when the company expects gas production to go up. Reliance expects to commence gas production from its Krishna-Godavari blocks off the eastern coast from the second quarter of 2008, Mr Ambani said.

The company recently doubled its estimates of gas production from KG-D6 block to 80 million standard cubic meters of gas a day following an investment of $5.2 billion.

The company has drilled 32-33 wells and made more than 25 discoveries, Mr Ambani added. He said the country's upstream sector remained unexplored and the Government has put in place policies for encouraging exploration in the country.

Regarding the Jamnagar refinery of the company, Mr Ambani said the expansion programme was on track and would be competed by mid-2008.

In response to a query whether Reliance, which also produces petrochemicals and textiles, has plans to hive off its oil and gas business into a separate company, Mr Ambani said there were no such plans. During the session, he said the taxation impact on petroleum products needed to be alleviated. ``New mode of taxation is required in petroleum sector as seen in other sectors where low tax has benefited,'' he said.

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