A recent report from the oil ministry shows that India’s natural gas production may decline to around
104 mmscmd in 2012-13 from 114.90 mmscmd in the previous fiscal.
The report attributes the possible decline in gas output mainly to the fall in KG-D6 output to 23 mmscmd from over 30 mmscmd last year.
The report also expects a sharp rise in imports of liquefied natural gas (LNG) over the next 2-3 years. Import costs three times the price of domestic gas.
Imports of LNG or natural gas – cooled to its liquid form for ease of transporting in ships – at 39.32 million standard cubic meter a day constituted 25.5 per cent of the total consumption of the fuel in India in 2011-12.
This share will rise to 41 per cent in current fiscal and to 50 per cent in the next, the ministry’s projections showed.
In current fiscal, LNG imports will jump to 73 mmscmd and are projected to further rise to 105 mmscmd in 2013-14, equalling the domestic gas production of that year. In 2014-15, imports at 115 mmscmd will surpass domestic production of 113 mmscmd.
Industry officials said the domestic output has stagnated in absence of remunerative prices. UK’s BP Plc, which partners RIL in the flagging KG-D6 gas block and other gas discovery areas, recently wrote to Oil Minister M Veerappa Moily saying around 5 trillion cubic feet of discoveries in KG-D6 and NEC-25 block in Mahanadi basin can be developed on price clarity.
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