Reliance Industries Ltd has filed with the government a multi-billion dollar plan to develop the gigantic D6 gas field off the Andhra Pradesh coast, with production starting in August 2006.

The company plans to invest $500 million in the first phase to produce 500 million cubic feet per day (14 million standard cubic metres per day) of gas from August 2006, sources said.

Almost the entire output of the first phase will be consumed by National Thermal Power Corporation's Kawas and Gandhar power projects in Gujarat, for which the company plans to lay a pipeline from Kakinada to Uran.

RIL, which owns 90 per cent stake in the Krishna Godavari basin field D6 that is estimated to hold 14.5 trillion cubic feet of gas reserves, had last month bagged the NTPC tender for supply of gas to Kawas and Gandhar projects by quoting a delivered price of $2.97 per million BTU.

Canadian firm Niko Resources has the remaining 10 per cent stake in the field.

"The development plan was submitted last week to the government," sources said, adding RIL will invest $800 million more in the second phase to boost production to 40 million standard cubic metres per day by 2008-09, when the company's mega power plant at Dadri comes on stream.

The output could be jacked up to 60 million standard cubic metres per day if RIL wins NTPC's tender for supply of gas to its power plants in Kerala.

Sources said RIL plans to lay a 1,400-km long pipeline from Kakinada, the nearest landfall point in Andhra Pradesh, to Uran in Maharashtra. Uran will be hooked up to Kawas and Gandhar in Gujarat.

As per the plans, RIL will construct a 48-inch pipeline from Kakinada to Hyderabad. From Hyderabad, the pipeline, 36 inches in diametre, will travel to Goa and then to Uran. An offshoot at Hyderabad would carry gas to Delhi.

Overruling GAIL's objection to Reliance executing the pipeline, the ministry of petroleum and natural gas has suggested that Reliance be allowed to lay the pipeline after inviting objections/third party request for capacity usage.

The suggestion borrows from the guidelines for laying petroleum product pipeline.

The ministry will ask the RIL group firm, Gas Transportation and Infrastructures Co Ltd, to get their proposal publicised (after vetting by the ministry) inviting expression of interest (for capacity)/filing objection within 90 days.

The pipeline will have a capacity to transport 45 million standard cubic metres of gas per day with a pipeline pressure of 92 bars.

GAIL had proposed a levelised tariff of $0.39 per million British thermal units for 25 years but RIL said the tariff was "excessive and not competitive."

GTICL tariff will be 25 per cent to 30 per cent less than GAIL's indicated tariff and it will be able to bring gas from east coast to Dadri in less than $1 per million BTU.