Panel seeks blueprint to improve natural gas output, supply

Govt should clearly indicate the availability of gas for the power sector in the next 5 to 10 years: Panel

A Parliamentary panel has suggested that the Petroleum Ministry should prepare a blueprint to improve production and supply of natural gas to curb the widening demand-supply gap of the fuel.

According to the recommendations, the government should clearly indicate the availability of gas for the power sector in the next five to 10 years so that utilities can factor in the estimate before investing in gas-based plants.

The recommendations of the Parliamentary Standing Committee on Petroleum and Natural Gas were submitted last month. The panel was headed by Vundavalli Arun Kumar, a Member of Parliament from Andhra Pradesh.

The committee said the gap between demand and supply of gas in the country is widening and noted that in 2012-13, availability of gas, including imported LNG, was 134 million metric standard cubic meters a day (mmscmd). That was less than half the demand of 286 mmscmd.

The shortfall is estimated to widen to 300 mmscmd in 2015-16, with supply of 139 mmscmd against demand of 439 mmscmd. The bulk of the deficit is expected to be met through imports of liquefied natural gas (LNG).

"Unconventional sources of gas like Gas Hydrates, CBM, Shale Gas should be seriously monitored for exploitation and development," the panel said.

"Therefore, the committee recommends that Ministry should prepare a blueprint to improve the production and supply of natural gas in the country so that there is no deficit in meeting the domestic demand," the committee said.

The panel noted that while LNG terminal capacity is expected to grow to 180 mmscmd by 2016-17 from 53 mmscmd currently, it still would not be sufficient to cater to increasing LNG imports.

The panel was of the view that the Petroleum Ministry should prepare a plan to explore all options to increase production and supply of natural gas in the country.

"Towards this end, the committee desires that the ministry should increase the blocks awarded for exploration, intensify activities for exploration and production of shale gas, pursue strong diplomatic efforts to expedite construction of transnational pipelines from neighbouring regions to bring gas and try to enter into long-term contracts for import of LNG at cheaper cost," it said.

The committee felt gas allocation by the Empowered Group of Ministers should be more pragmatic as there is a mismatch between production and the allotments made to various sectors.

The panel said it is surprising to note that the allocations made by the EGoM for 2012-13 were to the tune of 238.27 mmscmd, which was more than double the projected production during the period.

Somabhai Gandalal Koli Patel, Lok Sabha member from Surendranagar in Gujarat, is the acting Chairman of the Standing Committee.