RIL to Produce 3.5 mscmd CBM by 2014

India's Reliance Industries expects to produce up to 3.5 million standard cubic metres a day (mscmd) of gas by the second half of 2014 from two coal-bed-methane (CBM) blocks in central India, the company said in a newspaper advertisement.

The energy conglomerate invited bids for selling the gas for five years from its blocks at Shahdol and Annupur in the state of Madhya Pradesh.

The fields are likely to start production by July 2014 and the price reached through the bidding will need to be approved by the government, a company official said on Friday.

Bidders for the CBM gas will have to pay a marketing margin of $0.15 per million British thermal units, transportation tariff, and any taxes or levies on the sale, in addition to the gas price, the company said in the advertisement.

The deadline for the bids is Feb. 17.

Reliance, controlled by billionaire Mukesh Ambani, holds another CBM block in the neighbouring Chhattisgarh state.

The company, India's biggest company by market value, has been under pressure from the government and investors because of falling output from its Krishna Godavari D6 gas fields off India's east coast.

Reliance's market value tumbled 35 percent in 2011 because of worries about falling gas output, and the stock underperformed the main Mumbai market, which fell nearly 25 percent in the same period.

It currently produces less than 40 mscmd of gas from the field, half of its expected production.

This has resulted in a sharp decline in India's domestic output of gas and forced the country to hunt for expensive liquefied natural gas overseas to meet the growing demands of an expanding economy.

India holds 10 percent of the world's coal reserves, which are likely to hold about 92 trillion cubic feet of coal bed methane, the country's oil minister said in December.

Source: Reuters