India's largest petrochemicals and oil company, Reliance Industries Ltd, will start producing gas from its deep-sea block in southeastern India in a year and a half, a company official said on Tuesday.

"We hope to start producing gas by the middle of 2004, subject to government clearances," president of Reliance's Gas Business R P Sharma said.

The firm announced in October that it had found an estimated seven trillion cubic feet, or around 200 billion cubic metres, of gas in the Krishna-Godavari basin off the coast of Andhra Pradesh.

“Seven tcf are in-place reserves and recoverable reserves are about five tcf gas,” Sharma said.

He said the firm would produce up to 40 million cubic metres or 1.44 billion cubic feet of natural gas a day from the field in the Bay of Bengal.

This is India's largest gas discovery in three decades and augurs well for more finds in other blocks along India's east and southeast coast, officials and analysts say.

Reliance struck gas at all five exploration wells at depths of more than 2,100 feet in its D-6 exploration block.

Sharma said Reliance planned to drill 25 developmental wells but did not give more details about its plan to develop the field and sell the gas.

Analysts say the gas is far away from the main markets in northern and western India and the deep-sea field would be costly to develop.

But Sharma said the company would sell gas at competitive rates.

Industry officials say the northern and western parts of India had a higher gas demand than other parts because India's main gas pipelines passed through those regions.

Another Reliance official said the company planned to build a pipeline from Kakinada in the east coast to Goa in the west, and another one connecting Cuttack in Orissa with Jamnagar in Gujarat, India's most industrialised state.