A high-level committee on utilisation of natural gas in Andhra Pradesh has estimated the demand for gas in the state to be in the order of 22 MMSCMD (million metric standard cubic metres per day) in 2005-06 as against the current demand of 10.82 MMSCMD.

Though the committee cautions that the figures are tentative and need to be validated by detailed demand surveys, the gas demand is projected to go upto 42 MMSCMD by 2009-10.

The high-level committee under the chairmanship of T L Sankar, an energy sector expert, was appointed by the state government with the objective of utilising the recent major natural gas discovery in the state.

The other members of the committee include Varada Rajan, the former CMD of IPCL, M Gopalakrishna, the chairman of APSFC, K V Raghavan, the director of IICT, and J C Mohanty, the secretary (coordination) of the state government.

The committee had a wide-ranging consultation with all the stakeholders of natural gas -- the gas exploring companies, the current users of gas, potential users of gas and government policy makers.

The committee in its report, which was also approved by the state cabinet recently, estimated the additional demand to come mainly from new power projects, fertiliser projects, cement industries, iron & steel industry and other industries like ceramics through conversion to use gas for heat and energy purposes.

The committee observed that utilisation of gas is a function of availability, adequacy, accessibility and affordability.

While the recent large finds of gas assures of availability and adequacy in the near future, affordability is determined by the price of gas delivered at the user point and alternatives available.

The accessibility to gas is determined by the economics of transport and supply, and availability of pipelines of appropriate size to meet local needs.

The committee noted that in addition to the recent gas discovery in Krishna-Godavari (KG) basin by Reliance to the tune of 9 trillion cubic feet, which was subsequently revised by the company to 14 trillion cubic feet, exploration for natural gas by ONGC, Reliance, Gujarat State Petroleum Corporation (GSPCL) is in progress.

While ONGC is conducting exploration in about 28,000 square km onland and 42,000 square km offshore and Reliance has got five offshore blocks under NELP-1 and NELP-III in KG basin.

The committee, however, observed that there is a considerable uncertainty about the time-frame of gas availability and price at which the new found gas is likely to be sold, and that many policy decisions affecting transport and pricing of gas are yet to be taken by the centre.

The committee concluded that 40 MSMCMD of offshore gas by Reliance can be landed at the landfall location on the state coast near Kakinada within the next 30 months, provided the necessary approvals are expedited.