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India foresees additional gas supplies by 2007
Tuesday, 01 October 2002, 19:30 IST
NEW DELHI: India hopes to enhance gas supplies by 40 million metric standard cubic meters a day (MMSCMD) in the country by 2007 through imports and domestic resources.
India has a gas demand of 119 MMSCMD and is currently able to meet just half of this with an indigenous production of 65 MMSCMD.
While stepped up exploration in 47 blocks is under way with promising signs of gas potential in some of the fields, more blocks are to be awarded soon under the third round of the New Exploration Licensing Policy.
"These exploration efforts are expected to add another 20 MMSCMD to our current production of around 65 MMSCMD. Another 20 MMSCMD is expected to come through by 2007 with three liquefied natural gas (LNG) projects under various stages of execution," Petroleum secretary B.K. Chaturvedi said.
Several new promising gas strikes have been made in the last few years in the coast off Gujarat, in Rajasthan and in the Krishna-Godavari basin along the east coast.
Officials said the Reliance Group too has made a major gas strike off the east coast.
With the new focus on clean transport fuel that includes utilisation of compressed natural gas (CNG) in highly polluted cities like New Delhi and Mumbai, the pressure on existing domestic supplies has increased manifold.
Power and fertiliser units are the major consumers of gas in India, accounting for 40 percent share each, while the remaining 20 percent is facing heavy demand from other industries and the transport sector.
"Though a dozen LNG projects have got government approval, indications are only three are likely to come up in the near future," said Chaturvedi.
The three are Petronet LNG, a consortium of state-owned oil and gas majors that hopes to have gas flowing from Qatar from March 2004, Dutch oil major Shell's project at Hazira that has tied up for gas supplies from Oman and the Kakinada LNG project in Andhra Pradesh being set up by the Indian Oil Corporation in a joint venture with BP Amoco.
Of them, Petronet LNG has completed 40 percent work on its five million metric tonnes per annum (MMTPA) capacity Dahej terminal in Gujarat. Shell is reported to be tying up the engineering contract for its 2.5 MMTPA project and the Kakinada project of 2.5 MMTPA capacity is awaiting environment clearances.
Power and fertiliser plants are in particular awaiting ready supplies of gas to replace more costly fuel stocks like naphtha. Initial estimates indicate that the imported LNG is bound to be more expensive than the gas being supplied currently.
As India awaits the completion of the first LNG receiving and re-gassification terminal at Dahej by December 2003, the petroleum ministry is working out modalities to ensure there is a ready market for imported gas by making the fuel more affordable.
The ministry is mulling pooling the imported LNG with indigenously produced gas and fixing a price on a weighted average basis, which will work out to $3.5 per million metric British thermal unit (MMBTU) as against the expected LNG delivered price of between $3.6-5 MMBTU at various points in India.
Gas infrastructure major GAIL is currently supplying gas through its Hazira-Bijaipur-Jagdishpur pipeline at 
2,850 per standard cubic metre (SCM), which works out to around $1.5-1.8 MMBTU.
After inclusion of transportation and state taxes, this works out to around 3,500 to 4,000 SCM, or about $2.5-3.0 MMBTU.
As against this, the price of imported LNG would be steep. Even after the expected revision of domestic gas price, petroleum ministry officials admit the imported gas would be more costly, but one-third the cost of naphtha.
"After pooling the imported LNG with domestic gas, it could be provided at delivery point at around $3.5 MMBTU," Chaturvedi said.
The power and fertilizer sectors are seeking a much lower subsidized price for gas at the delivery point and have approached the finance ministry. These are among some of the issues that will be dealt with as India formulates a new gas policy.
Source: IANS
2,850 per standard cubic metre (SCM), which works out to around $1.5-1.8 MMBTU.
After inclusion of transportation and state taxes, this works out to around 3,500 to 4,000 SCM, or about $2.5-3.0 MMBTU.
As against this, the price of imported LNG would be steep. Even after the expected revision of domestic gas price, petroleum ministry officials admit the imported gas would be more costly, but one-third the cost of naphtha.
"After pooling the imported LNG with domestic gas, it could be provided at delivery point at around $3.5 MMBTU," Chaturvedi said.
The power and fertilizer sectors are seeking a much lower subsidized price for gas at the delivery point and have approached the finance ministry. These are among some of the issues that will be dealt with as India formulates a new gas policy.
Source: IANS