Oct. 25 (Bloomberg) -- Cairn India Ltd., a unit of Cairn Energy Plc, may spend as much as $2 billion in India by 2009 to develop oil and gas areas and meet demand in the world's second- fastest growing economy.

The company may spend as much as $500 million to build a 600-kilometer pipeline that can carry 150,000 barrels a day of crude from Rajasthan in 2009, said company Chief Executive Officer Rahul Dhir. Cairn will invest the remaining amount to develop oil and gas in 15 areas in India.

``We have short listed contractors and suppliers for the pipeline,'' Dhir said by telephone from Gurgaon near New Delhi today. ``Construction may start sometime next year once land is acquired for the pipeline.''

Cairn India sold shares in December to part finance development of its fields in Rajasthan in western India. The company expects oil output from the Rajasthan field to reach 150,000 barrels a day by 2009.

Cairn and its partners produced 75,280 barrels of oil equivalent a day in the quarter ended September compared with 77,392 in the previous quarter, the company said in a statement to the Bombay Stock Exchange. Cairn has a 40 percent interest in Cambay Basin and 22.5 percent in Ravva in eastern India.

Cairn India, which listed on the Bombay Stock Exchange on Jan. 9, didn't give year-ago volumes.

Oil and gas production in the fourth quarter and in 2008 may remain unchanged, Dhir said.

``There was a drop in production last quarter in a couple of wells in Lakshmi,'' Dhir said, explaining the dip in production quarter-on-quarter. ``We have started a drilling campaign in Cambay.''

Cairn operates in 15 areas of which two, in Cambay Basin on the west coast and Ravva in the east, are in production. The Rajasthan oil block is under development and the remaining areas are being explored.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net.

Last Updated: October 25, 2007 10:04 EDT