Global energy major British Gas plans to double investments in India from $500 million and expand operations to set up captive gas-based cogeneration plants.

"We plan to increase our investments in India to $1 billion in two to three years' time with an additional investment of $250 million in the Panna-Mukta and Tapti fields and another $250 million in setting up cogeneration facilities," Frank Chapman, CEO of British Gas India, told reporters here Monday.

Chapman was speaking on the sidelines of the ongoing Petrotech 2005 conference here.

British is partnering state-owned exploration major Oil and Natural Gas Corporation (ONGC) and private conglomerate Reliance Industries in the oil and gas rich Panna-Mukta and Tapti fields off the west coast.

The three partners plan to invest around $750 million in the Panna-Mukta and Tapti fields to raise production. Of the total additional investment planned, British Gas will contribute $250 million.

The investment is expected to further raise gas production at the Panna-Mukta field from 135 million metric standard cubic feet a day (MMSCFD) to 200 MMSCFD.

"Theoretically there is more potential depending on how gas production will affect oil production. The matter is currently under discussion," said Chapman.

In the case of the Tapti field, the additional investment is to raise gas production from 250 MMSCFD to 450 MMSCFD.

Panna-Mukta, one of the largest oil and gas producing fields in India, currently produces 60,000 barrels a day. "Our efforts are directed towards maintaining the plateau of production," said Chapman.

The company plans to replicate its experience of cogeneration in Sao Paulo, Brazil, where small plants have been set up using gas to generate electricity and heat for heating or air-conditioning purposes.

"We welcome the government decision to allow us to sell gas produced by us to our customers. We will be looking at delivery within India," said Chapman, disclosing plans to set up captive cogeneration units of 1MW and above for industries and companies including the hospitality industry.

"We have started putting a team in place specifically for cogeneration," he said.

"Two customers have approached us so far for cogeneration projects, which tend to be small units. Whether British Gas will use it own molecules of gas or not will be seen."

The decision will depend on the government's policy on gas pipelines. "It is important to have open access pipelines. It is crucial that the new regulatory framework allows for competition," said Chapman.

While focusing on developing gas markets through supply of liquefied natural gas (LNG) mostly to Europe and the US, British Gas is keen initially to meet gas demands within India from its own production in the country.

"In some part of our evolution, we will engage in LNG trade with India," Chapman said.

"An LNG terminal is not the end, but for supply of LNG to ensure against short supply. What we are trying to do is to develop the market and pull in the supplies."

The British energy major is targeting to enhance its LNG ship fleet to 15 by 2010 for supplies to its customers globally. At some point in the future depending on demand, it plans to redirect cargos to India.