India's gas output to double to 211 mmscmd by 2026-27

PNGRB commissioned report said domestic gas production, which was 101.1 mmscmd in 2012-13, is projected to rise to 156.7 mmscmd in 2016-17

India's natural gas production will more than double to 211 million standard cubic metres per day by 2026-27 on back of desired policy support and correct pricing signals, the oil regulator has 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 Petroleum and Natural Gas Regulatory Board (PNGRB).

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 government accepting a formula proposed a committee headed by 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 as per this formula will double to USD 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 light of the day.

Total supplies of 145.7 mmscmd in 2012-13 was short of demand of 242.66 mmscmd. The supplies made up of 101.1 mmscmd from domestic fields and another 44.6 mmscmd coming from LNG imports.

In 2021-22, LNG imports will outstrip domestic production with an estimated 188 mmscmd being shipped into India. Together with production of 182 mmscmd from domestic fields and another 30 mmscmd coming rom the TAPI pipeline, the total supplies will be 400 mmscmd, far less than 516.97 mmscmd demand.