India’s natural gas production will more than double to 211 million standard cubic metres per day by 2026-27 on the back of desired policy support and correct pricing signals, Petroleum and Natural Gas Regulatory Board (PNGRB) said. Domestic gas production, which was 101.1 mmscmd in 2012-13, is projected to rise to 156.7 mmscmd in 2016-17 and to 182 mmscmd in 2021-22, according to a study commissioned by the regulatory board.
The report further projected the output to rise to 211 mmscmd in 2026-27 and to 230 mmscmd in 2029-30.
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 the government accepting a formula proposed by a committee headed by the 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 according to this formula will double to $8.4 per million British thermal unit when implemented in April 1, 2014, a rate which has been hotly contested.
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.”
India’s demand for natural gas, it said, is likely to more than double to 517 mmscmd day by 2021-22 from 242.66 mmscmd in 2012-13. It will further rise to 746.03 mmscmd in 2029-30. Demand will outstrip supplies even after considering import of gas in its liquid form (liquefied natural gas or LNG) and transnational pipeline from Turkmenistan seeing the light of the day.