Mumbai, April 8 (IANS): Reliance Industries' recent gas discovery MJ-1 in its eastern offshore KG-D6 block, as announced by consortium partner Niko Resources, could add Rs.1.50 to 2.60 to RIL's earnings per share (EPS), leading investment firm Morgan Stanley said on Wednesday.

Niko Resources said on Wednesday that RIL's gas discovery MJ-1 may hold 1.4 trillion cubic feet of gas resources, roughly half of the reserves in the KG-D6 block's main gas fields.

"Assuming a 10-year production life and recovery factor of 70 percent for gas and 50 percent for oil, we think this discovery can produce an incremental 6 mscmd (million standard cubic feet per day) of gas and 6.7 kbpd (thousand barrels per day of oil)," Morgan Stanley said in a release here.

"This could add Rs.1.5-2.6 to EPS, or which may be valued at Rs.18-32 to RIL's share price," it added.

"We think any meaningful production from this (MJ-1) could still be 4-5 years away," Morgan Stanley said.

Niko cited an independent resources evaluation report for the discovery -- located about 2,000 metres below the producing D1-D3 field -- from Deloitte LLP to say that the find may hold an estimated of 1.4 Tcf of gas and condensate.

RIL stock closed on Wednesday at Rs.865.50 a share, 3.93 percent, or 32.70 points, higher than its previous close on the BSE.