As per GAIL (India) Limited, Ministry of Petroleum and Natural Gas, the demand for Natural gas is growing rapidly in the country and has almost doubled in the last 5 years. From the current share of 10% of the energy basket of the country, it is anticipated to grow to about 25% by 2025. The fertilizer and power sector are the two most demanding sectors (Speculation is that about 70-75% of new demand will originate from the power and fertilizer sectors.); however industrial and city gas demand is also growing rapidly. (Know more on NG based power generation in India)
Production and Demand of Natural Gas;
- Domestic production of natural gas is presently around 132.83 million metric standard cubic meters per day (MMSCMD).
- The main producers of natural gas are Oil & Natural Gas Corporation Ltd. (ONGC), Oil India Limited (OIL), JVs of Tapti, Panna-Mukta and Ravva and Reliance Industries Limited (RIL) which has discovered gas in the Krishna Godavari basin at its KG D6 block in the east coast of Andhra Pradesh.
- Out of the total domestic production (as of December 2009), about 43% was produced by Reliance Industries Ltd. alone.
The following tables provide the details of production of natural gas in 2009-10 by both private & public sector along with segment wise demand for natural gas.
Production of natural gas in 2009-10
|Source (2009‐10 figures)||Volume (MMSCMD)|
|ONGC and Oil||54.32|
|*RIL KG D6||57.14|
|PMT/ Rava/Rava Satellite||18.67|
|Long term RLNG||21.69|
*December 2009 data, (Source: MoPNG and GAIL)
Segment wise demand for natural gas (MMSCMD)
(Source: Working group report on petroleum and natural gas sector for the 11th plan period)
Sector wise allocation of Natural Gas;
In India, fertilizer and power generate approximately 62% of the total demand for natural gas and are the only priority sectors for supply of natural gas. It should be noted that the government of India gave priority to power generators and fertilizer producers. These sectors also benefit from the lowest rate (Administered Pricing Mechanism prices decided by the government) by the state-owned oil and gas companies. Other industrial users interested in switching to gas do not have access to low-priced gas resources. Industries that do not fall under the priority sectors have to shell out higher amounts to private companies and LNG importers for their natural gas.
The reason for this disequilibrium in pricing is the limited availability of natural gas sources in the country. The government had to prioritize sectors like fertilizers and power as they play crucial roles in the country’s growth. Lately however, non-priority sectors are also joining the wagon and shifting towards this clean fuel despite the high prices and the low availability. This trend means that we can expect the country to revamp its natural gas policies and gear up for more natural gas explorations.
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