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Natural Gas Production in India: On a Roll

In the past two decades, natural gas has emerged as the most preferred fuel due to its environment-friendly properties. In India, demand for natural gas is rising at a fast pace. To cater to this demand, domestic production too has been rising. Natural gas production grew by a whopping 44.8% in 2009-10 compared to a mere 1.3% in 2008-09. This was majorly contributed by Reliance Industries (RIL) that commissioned production from its KG basin in April 2009.

Natural gas production in India is currently around 143 mmscmd, of which around 42% comes from RIL’s Krishna- Godavari Basin D6 fields. Production is expected to rise by 25% to 180 mmscmd by 2010-13. Following are the expansion plans of gas exploration companies (as per CMIE’s August 2010 report):

  1. Around 9 mmscmd is expected in 2011-12 from Oil and Natural Gas Corporation
  2. In 2012-13, RIL will ramp up production by 20 mmscmd to hit a peak of 80 mmscmd from the KG-D6 fields.
  3. Another 8 mmscmd is expected to come from Gujarat State Petroleum Corporation’s KG basin field.

An empowered group of ministers has given fertiliser plants the highest priority in usage of KG-D6 gas, followed by LPG extraction plants, while gas-based power plants are third on the list.

These are followed by city gas distribution entities for supply to domestic households, transport sector, steel plants, petrochemical units, refineries and captive power plants.

Gas Transmission & Distribution

To capture this transmission opportunity provided by the surge in production, the natural gas pipeline infrastructure in the country is being ramped up.

GAIL is currently the market leader in the natural gas transmission segment. It is expected to add a whopping 8,451 km of pipeline by 2012-13. This accounts for nearly 63% of the country’s total planned capacity addition. Hence, it is expected to remain the leader and maintain its market share in the natural gas transmission business, states CMIE.

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Categories: Natural Gas
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