Reliance Industries Ltd has found new natural gas reserves in Krishna Godavari basin D6 block off the east coast, the company's minority partner Niko Resources has said.

"The deepwater frontier drilling rig has now completed drilling of an exploratory well, AA-1, which has resulted in (discovery of) a new high potential natural gas zone," Niko Resources, which holds 10 per cent stake in the block, said.

Reliance has, till date, made over a dozen gas discoveries and two oil finds on the block KG-DWN-98/3, also known as D6. The AA-1 well is located in the new 3D seismic area, south-east of the previous gas finds.

"The drilling rig (has) commenced drilling of the Q1 exploratory well. The Q1 well is approximately 15-km southwest of AA-1 and 8-km northwest of the P1 natural gas discovery," it said.

All of D6 is now covered with 3D seismic. Processing and integration of the surveys are expected to be completed by the year-end.

Reliance had found oil reserves in MA-1 and MA-2 wells on the D6 block with total reserves being put at 140-million barrels. It will invest $1.43-billion to produce 40,000-50,000 barrels per day of oil from the finds by first quarter of 2008.

Gas production from the block will begin in mid-2008 and the company is investing 5.2-billion dollars in bringing to production Dhirubhai-1 and 3 discoveries, first two of the over dozen gas finds.

"The approved field development plan of Dhirubhai-1 and 3 provides flexibility in the critical portions of the facilities to facilitate gas production of up to 4.2 billion cubic feet per day," Niko said.