Domestic natural gas production increased 22.7% year on year (y-o-y) to 2,651 million standard cubic metre (mscm) in April, mainly due to higher production from Reliance Industries and BP’s ultra-deep-water field in the KG D6 Block of the Krishna Godavari basin on the east coast.
The 2.5 million tonne (MT) of crude oil produced in the country during the month was 2.1% lower than the production in the year-ago period.
Indigenous natural gas production caters to about 51% of the country’s requirements, while around 85% of the country’s crude oil is imported. Domestic natural gas output fell 8.1% y-o-y to 28,670.6 mscm in FY21. Total consumption of 5,238 mscm of natural gas in April was 34.5% higher than the corresponding month of the previous year. The 2,655 mscm of liquefied natural gas (LNG) imported in the month was 45% more than the import volumes of April 2020.
Reliance Industries and BP’s new field started production in December 2020 at 1.3 mscm per day (mscmd) and ramped up to 9.6 mscmd in March 2021.
Total gas output in the month would have been higher if there had been no delay in commencement of gas production at the neighbouring field owned by Oil and Natural Gas Corporation (ONGC). The pandemic impacted manufacturing of subsea items for ONGC and delayed well completion. The state-run company has already floated the tender for supplying 2 mscmd gas from the field starting June 30.
The current price for gas produced from local nominated fields has been revised to an all-time low of $1.79/ million British thermal units (mBtu) by the government, which is much below the breakeven point for most fields, deterring gas producers from aggressively increasing production or getting into new high-risk projects. For ultra-deep-water gas fields like the Krishna Godavari basin, which have higher pricing and marketing freedom, the current price cap is set at $3.62/mBtu.