Projected to rise from 242.66 mmscmd to 378.06 mmscmd

India’s natural gas demand is likely to jump by over 55 per cent to 378 million standard cubic meters a day (mmscmd) by 2016-17 but its availability will be way short of the requirement.

Natural gas demand is projected to rise from 242.66 mmscmd in 2012-13 to 378.06 mmscmd in 2016-17 and more than double to 516.97 mmscmd in 2021-22, according to a study commissioned by the Petroleum and Natural Gas Regulatory Board (PNGRB).

However, gas availability in the country will lag the demand. Domestic production of 101.1 mmscmd in 2012-13 will rise to 182 mmscmd by 2021-22 while import of liquefied natural gas (LNG) is projected to jump from 44.6 mmscmd to 188 in 10 years.

The total availability of gas in 2016-17 at 299.7 mmscmd will be way short of the demand. In 2021-22, the study said cross border pipeline may start flowing 30 mmscmd of fuel raising the total availability to 400 mmscmd, still short of the requirement.

It said the country’s gas output can more than double to 211 mmscmd by 2026-27 on the back of desired policy support and correct pricing signals.

The natural gas sector, it said, is at the threshold of rapid growth in India supported by ever increasing demand, increased exploration efforts, commissioning of LNG import terminals and the development of a nation wide natural gas pipeline grid.

“However, there is a need to provide a proactive enabling environment to support the fast-paced development of natural gas infrastructure,” the report said. “An enabling environment includes providing desired policy support and the correct pricing signals for investment in the sector.”

The report comes amidst controversy over government accepting a formula proposed a committee headed by Prime Minister’s economic advisor C. Rangarajan for pricing of all domestically produced natural gas at an average of international hub rates and cost of imported LNG.

Gas price as per this formula will nearly double to USD 8.3 per million British thermal unit when implemented.

The PNGRB commissioned report said the enabling environment also includes “reforming the present set of regulations to adopt to changing needs and making them more robust and addressing the distortions in the fiscal regime applicable for natural gas”.

In 2021-22, LNG imports will outstrip domestic production with an estimated 188 mmscmd being shipped into India.

Together with production of 182 mmscmd from domestic fields and another 30 mmscmd coming from the TAPI pipeline, the total supplies will be 400 mmscmd, far less than 516.97 mmscmd demand.

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