Reliance Industries Ltd [Get Quote] will start natural gas production from its prolific eastern offshore KG-D6 fields in the first week of March, petroleum secretary R S Pandey said on Tuesday.

The company won the Bombay high court approval last week to sell gas from KG-D6.

"We have been told that Reliance will start gas production in the first week of March," he said at a function organised to inaugurate the Mundra-Delhi oil product pipeline.

RIL will initially start gas production from eight wells, with an initial output likely to be 5 mmscmd (million standard cubic metres) per day.

This will rise to 15 mmscmd by March-end and to 40 mmscmd by July/August. Production planning would enable the allocation of the fuel within the sectors already prioritised by the government, Pandey had said earlier, adding simultaneously Reliance will finalise the model gas sale agreement and ink sale deals before production starts by the end of February.

Bombay high court had last week allowed Reliance to sell gas from KG-D6 at $4.20 per million British thermal units in accordance with the government's gas utilisation policy, which gives priority to fertiliser units followed by existing power plants.

India faces an acute shortage of natural gas and the current availability of 105 mmscmd meets only 55 per cent of the demand.

But Reliance was previously restrained by the Bombay high court from selling KG-D6 gas to any company other than Anil Ambani Group firms and state-run NTPC.

Pandey had said that the government intervened in the dispute to get the ban lifted so that the fuel-starved fertiliser and power companies get natural gas.