NEW DELHI (Reuters) — India's Reliance Industries Ltd. will sell piped natural gas to domestic consumers at two-thirds the price of liquefied petroleum gas to capture market share, Chairman Mukesh Ambani said on Monday.

"Our gas will cost one third less than that of LPG," Ambani told reporters on the sidelines of a conference.

Ambani said commercial production should start by mid-2008, and gas business would significantly contribute to the company's revenue by the financial year to March 2010.

The price of cooking gas is heavily subsidized by the government and costs about 300 rupees ($6.7) for a 14.2 kg cylinder.

Reliance has struck gas in the Krishna Godavari Basin off India's east coast and has sought approval to its double production rate from an initial estimate of 40 million metric standard cubic meters per day (mmscmd) of gas to 80 mmscmd.

The company will begin gas distribution in 100 cities once it receives government approval. India is expected to soon announce a policy on setting up gas pipelines and city gas distribution networks. The government expects India to be self sufficient in gas in the next 15-20 years with the help of new finds, LNG imports and the laying of transnational gas pipelines. ($1=44.64 rupees)