Page last updated at 17:55 GMT, Thursday, 2 April 2009 18:55 UK

India extracts Bay of Bengal gas

By Chris Morris
BBC News, Delhi

Reliance refinery
Reliance say that the gas will be a major boost for India

The Indian company Reliance Industries has started pumping natural gas from a massive deep-sea field in the Bay of Bengal off India's eastern coast.

Eventually it will almost double the country's natural gas output.

Just over six years after the deep-sea field known as D-six was discovered under the Bay of Bengal, the first gas has been pumped ashore.

Within a few days supplies will reach Indian fertiliser companies which have first call on this new source of gas.

It is a big moment for Reliance Industries, which is owned by one of the world's richest men, Mukesh Ambani.

The company says the gas field will reach peak production by the end of this year.

And according to government officials the new gas supplies will then help India reduce its crude oil imports by about $9bn a year.

India has chronic energy shortages and growing demand in a sector which is still tightly controlled by government regulations and official pricing policies.

A big new supply of clean energy will be a welcome boost for consumers and it may also be a sign that the government recognises that the free market needs to play a bigger role in India's energy policy in the future.

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