India hopes for 75% increase in natural gas production

10th November 2014 By: Ajoy K Das - Creamer Media Correspondent

KOLKATA ( - Casting a ray of light amidst the overall gloom of energy shortages across the country, India’s Petroleum Ministry has forecast an estimated 75% increase in natural gas production over the next five years to between 163-million and 175-million standard cubic metres a day, up from 100-million cubic metres a day at present.

In an internal note circulated among relevant government departments, including the Power Ministry, the Petroleum Ministry said that higher natural gas production would be achieved despite lower production in the current year and the fact that about 24 000 MW of natural gas-based power projects have been left stranded owing to a shortage of fuel.

The note and the production forecast formed the background of the governmental exercise to frame a ‘pool pricing’ mechanism to supply natural gas to various user industries averaging the prices of domestic and imported natural gas, an official in the Petroleum Ministry said.

The Indian government last month approved a hike in the domestic natural gas price to $5.61 per million metric British thermal unit (mmBtu) up from $4.20/mmBtu with effect from November 1. The prices would be reviewed every six months, with the next review scheduled for April 1.

The country’s natural gas production declined by 13% during 2012/13 to 97-million cubic metres a day and was expected to marginally increase to 100-million cubic metres a day during the current financial year.

According to the Petroleum Ministry, national oil and gas exploration and production (E&P) major ONGC Limited would account for the bulk of the higher output, with the company boosting production from 24-billion cubic metres in the current year to 35-billion cubic metres by 2019 on back of development of its new blocks, including Daman offshore western India, and commissioning of blocks KG-98/2 in the Krishna Godavar basin.

The country’s second largest E&P major, Oil India Limited, was targeting an increase in natural gas production from 2.8-billion cubic metres at present to 4-billion cubic metres by 2019, once production begins from its gas blocks at Baghjan, in the north-eastern Indian province of Assam, in the next financial year, and its assets in the Krishna Godavar basin.

Based on the new production forecast, the Petroleum Ministry said all incremental gas produced would be used for supplies to the fertiliser industry up to the level of 31.5-million cubic metres a day as per recommendation of a high power government inter-Ministerial body, while the balance, if any, would be earmarked for power generation.