ANDHRA PRADESH

State to undertake gas exploration

Natural gas development council to be formed in line with panel advice Natural gas development council to be formed in line with panel recommendations

M. Malleswara Rao

HYDERABAD: The Andhra Pradesh Government has decided to go in for direct exploration of natural gas, ending the monopoly by four companies over the vast reserves available in the Krishna-Godavari basin.

The State will participate in tenders in July 2006 when the Union Government poses the rest of the blocks in the basin for competitive bidding.

It will float a new undertaking or a joint venture with private participation or simply get the job done by the recently-constituted Andhra Pradesh Infrastructure Corporation to lay pipelines for the gas tapped by the four companies.

Locational advantage

A natural gas development council headed by the Chief Minister will be formed as the first step in this direction in line with recommendations of the Gas Utilisation Committee, a top official said.

The State's entry into the arena, with distinct locational advantage, is expected to change the gas scenario drastically, adding a new dimension to the fledgling gas grid concept and the emerging gas economy.

This is likely to influence the national gas policy as well contemplated by the Centre.

According to an estimate, India accounts for 0.4 per cent of the world's gas reserves and 6 per cent out of this exist in the KG basin, amounting to about 60 trillion cubic ft (tcft).

The Government has bright prospects as the finds by the four companies -- ONGC (3 tcft), Reliance (14 tcft), Cairn of Australia (1 tcft) and, of late, the Gujarat State Petroleum Corporation (GSPC) (20 tcft) have covered only 38 tcft.

Well potential

From the present wells, including the most productive Bombay High, India is able to exploit 40 mcm (million standard cubic metres per day).

Reliance and the GPCL respectively struck gas 150 km and 10 km off the Kakinada coast and it will be at least a few years before they develop the infrastructure to bring the gas onshore.

The ONGC is supplying 7.5 MMSCMD from its onshore wells after laying pipelines but this is insufficient to meet the State's demand of 16.5 mcm.

Projected demand

The demand is set to touch 40 mcm by 2010 when the power projects alone require 21 mcm.

The State needs to add 1,000 MW installed capacity to the power grid for each two years.

The gas required for cooking and transport purposes by then will be 0.50 mcm.

With 41 per cent of the marked area in the KG basin still remaining untouched, the Government venture may prove to be a boon to the State.

If the find is 20 tcft as in the case of GSPC, it will be valued at a staggering sum of Rs 2.2 lakh crores.

Higher status

Kakinada will gain a mega terminal status as all the companies will have set up their landfall points here.

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