A core group of fertiliser companies recently made a presentation on the matter before the Government. The presentation was made by Iffco's managing director who is also the chairman of the core group.

This exercise follows the Government's feedstock policy for nitrogenous fertilisers which prefers natural gas (LNG) as the principal ingredient.

The department of fertilisers has come to the conclusion that natural gas happens to be the best option for production of fertilisers. The current production of natural gas, after taking into account internal consumption, flaring, shrinkage etc is, however, only 61 MMSCMD.

As against this, the total firm commitment made in terms of gas allocation to the various consumers is to theextent of 95.6 MMSCMD. As per the study conducted by an export group constituted by the ministry of petroleum and natural gas, the demand is assessed at 146 MMSCMD during 1999-2000, 180 MMSCMD in 2004-05 and 283 MMSCMD in 2009-2010, whereas the production of natural gas is expected to peak by the end of the Ninth five-year Plan. After this, the production would progressively decrease, according to the study.

It is clear, thus, that the gap between demand and supply will increase over the years to an unmanageable level.

The ministry of petroleum and natural gas has been concerned about the problem for some time and taken initiative regarding import of natural gas through pipelines. By setting up a consortium of fertiliser companies for import of gas, the department of fertilisers will only be supplementing the efforts being made by the ministry of petroleum and natural gas.

The Government had, it may be recalled, signed an agreement on principle terms with Oman in 1994 to import 56.5 MMSCMD of gas by theend of the decade. This project, however, did not materialise as the feasibility studies could not be completed to the satisfaction of the Government.

Serious questions have been raised regarding adequacy of gas reserves in Oman to support the proposed project. The technology for laying and maintaining a deep sea pipeline at the intended depth is yet to be developed on a commercial basis. On account of these hurdles, it has not been possible to implement this project till date.

Similar efforts were made to explore the possibility of bringing natural gas from Iran. An MoU was also signed in 1993. However, the feasibility study for the Iran-India pipeline could not be completed as the Government of Pakistan has not consented to the pipeline route survey through its territory.

Gail has also signed an MoU with Brown and Root, US, to explore the possibility of importing natural gas from Myanmar and other neighbouring countries to India.

According to preliminary estimates of the Government, however, theestimated gas reserves available in Myanmar do not justify a commercially viable transnational gas pipeline project.

As regards Bangladesh, while there are optimistic estimates on the gas reserves, the Government of Bangladesh has not yet permitted the export of natural gas from that country to India or to any other country. This situation could change, however, as some of the major multinational companies are currently working on Bangladesh's fields and there could be changes in the policy of the Government in the coming years.