India’s domestic gas output to rise 52% in next three years

India’s domestic gas output to rise 52% in next three years

Mumbai: India’s natural gas production from hydrocarbon resources is expected to rise 52% in the next three years, outstripping the growth in demand from power and fertilizer firms during the same period, and therefore reducing the intense pressure to import gas.

The country’s natural gas output is projected to increase to almost 230m metric standard cubic metres per day (mscmd) by 2017-18, a 52% growth from the current level of 138.33m mscmd as at the end of 2014-15.

This is against a growth in demand of 27% from the core natural gas consuming sectors, viz. power and fertilizer. Demand from these sectors during the same three-year period is slated to grow from 130.82m mscmd to 166.62m mscmd, leaving almost 63m mscmd to be tapped by other industries.

This is over and above the efforts taken by the current BJP government to increase the gas availability and utilisation in the country. These include intensification of domestic exploration and production activities through New Exploration Licensing Policy (NELP) rounds and development of a shale gas policy framework.

The authorities have also promoted research and development of gas hydrate resources in the country, import of liquefied natural gas (LNG), exploring possibility of transnational gas pipelines, clearance for exploration and development of some NELP blocks, exploration in the mining lease area with certain conditions and acquisition of overseas oil and gas assets.

The increasing supply, however, is not sufficient to meet the burgeoning demand of natural gas in India, as a substantial portion of the demand goes largely unmet and is not factored in to calculate the current demand number. Besides, at current consumption levels, the gas-starved Indian industries are heavily skewed towards imports of regasified LNG (R-LNG).

In the last 10 years, while India’s domestic production has grown by 10%, India’s imports of R-LNG have grown by 335% due to a major growth in demand, which has risen by almost 46%.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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