Natural gas set to gain home ground

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Technological developments are creating new product platforms and altering the delivery channels across industries. The last mile is often the toughest to achieve in the supply chain of most industries, more so for the traditional energy industry. Historically, the basic supply of fuel to homes is the cylinder-based LPG and for transportation needs, the predominant fuel supply continues to be petrol and diesel, all of these are refined petroleum products, derived from crude oil. The delivery channel is to access these products by either driving your vehicle to a fuel station or cylinder based LPG being driven to your home.

Over the next few years, India will accelerate its move to being a gas-based economy, propelled with the discovery and development of giant offshore gas fields, and the expansion of LNG terminals on the west coast of India. Natural gas, recognised as the fuel for the 21st century, is already powering gas-fired turbines for power generation and feedstock for the fertiliser industry. Its impact in the National Capital Region as a fuel for public transportation is now successfully completed.

The stage is now being set for natural gas to replace LPG as a fuel for households and for the development of CNG as a preferred fuel over petrol and diesel for city transportation requirements. Over the next five years, it is estimated that City Gas Distribution (CGD) networks could require investment of close to $50 billion (Rs 2 trillion). The ingredients needed for this make-over are slowly falling in place.

Now, with over 170 mmscmd of additional natural gas expected to flow by 2012, the supply gap is estimated to come down from the current levels of 68 mmscmd to 5 mmscmd by 2012. As per the Planning Commission, the demand of natural gas in cities is estimated to grow conservatively to 16-20 mmscmd by 2012, up from the current 12 mmscmd. The industry players have aggressive plans to increase coverage to over 200 cities, up from the current level of 20 odd cities. This will enable connectivity to over 40 million households and a large number of vehicles within the city gas networks.