KOCHI : Even as natural gas prices in India are set to increase from April, domestic production of gas is on the wane. Production has fallen from 34,575 million standard cubic metres (mscm) in 2013-14 to 31,138 mscm in 2015-16 – the lowest in three years.
During the period, total consumption increased from 52, 302 mscm in 2013-14 to 52,448 mscm in 2015-16. In the same period, imports of liquefied natural gas (LNG) from 17,728 mscm to 21,309 mscm. These figures indicate that India’s dependence on LNG imports will on widen in the future.
Experts say that low output from domestic players such as ONGC, Oil India and private sector Reliance Industry’s KG-D6 block have gone against the country’s ambitions of producing more gas domestically.
“Though the initial promise was 80 mscmd from the KG basin of Reliance, the output is less than 10 mscmd and even this is set to go down further.
The production by PSU companies are also not picking up. India is locked into an expensive long-term contract for LNG imports from Australia in the Kochi terminal so much so, there are no takers for this gas,” said Sudha Mahalingam, former member, Petroleum and Natural Gas Regulatory Board. According to her, the country will have to learn to pay for LNG imports as hope of increased domestic production is minimal. “We import four out of crude barrels required. Same scenario will happen in the case of natural gas as well,” she added.
According to a Reliance spokesperson, the drop in gas production is due to natural reasons. “Soil and water were mixed in the gas field, which was made it difficult to explore gas. Some of the areas, which were considered as gas reserves earlier, were not reserves at all.”
The production of gas during 2016-17 (till December 2016) is 23,087 mscm. Imports were 18,755 mscm. In all, India had consumed 41,843 mscm of gas in FY17.
“Currently, majority of the gas requirement in the country is met by domestic production. But, the situation is changing fast and we may find a trend reversal in the future. The imported gas will be always expensive as we have to factor in the cost of transportation,” said M P Sukumaran Nair, director, Centre for Green Technology and Management.