Home > Natural Gas, Power > Abundance of Natural Gas or Mismanagement?

Abundance of Natural Gas or Mismanagement?

Natural gas production in India surged to its highest levels in 2009-10. Production stood at 47,573 million cubic metres (mcm) during the year. Production from Reliance Industries’ (RIL) KG basin led to the surge in output. Currently, RIL is producing 60 million metric standard cubic metres per day (mmscmd) from the KG basin.

The company has emerged as the largest gas producer in the country accounting for about 37-38% of the domestic gas production. This share will increase in the coming months when production from the KG basin touches peak output of 80 mmscmd.

Natural gas production is still lower than domestic consumption. Then why is the government asking RIL to cut output?

The Union government has asked RIL to cut gas output from its off-shore oil fields in the KG-D6 block so that the inventories of imported liquefied natural gas (LNG), which have accumulated at Petronet LNG’s Dahej terminal in Gujarat, can be cleared off. The high inventories are a result of lower offtake by three fertiliser plants (closed for maintenance) and an NTPC power plant (which tripped).

However, inventories are expected to rise further soon with nine more consignments (ordered by GSPC through Petronet LNG) set to arrive at Dahej.

The capacity of GAIL’s pipeline network — used to transport gas from Dahej — is already under pressure. Additional supply of LNG will only clog the system, resulting in further delay in clearing the gas inventory.

While companies were being pushed to increase gas production & reduce dependence on imported gas, here is an example of lack of infrastructure to evacuate the same.

Natural gas in india
  Production Consumption
Million cubic meters % y-o-y growth Million cubic meters % y-o-y growth
2004-05 31,763 -0.6 30,775 -0.4
2005-06 32,202 1.4 31,025 0.8
2006-07 31,747 -1.4 31,368 1.1
2007-08 32,417 2.1 34,328 9.4
2008-09 32,845 1.3 42,960 25.1
2009-10 47,573 44.8 51,383* 19.6


Source: Petroleum Ministry                   
Categories: Natural Gas, Power
  1. Nikit Abhyankar
    May 13, 2010 at 6:11 pm

    Thanks for posting this.
    I think the key is knowing the terms of contract between Petronet and Rasgas (the LNG supplier) and the difference in the prices of LNG and RIL gas.

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