India gas output to rise 25% to 180 mmscmd by 2012-13

Domestic natural gas production will rise by over 25 per cent to 180 million standard cubic metres a day (mmscmd) by 2012-13 after Reliance Industries' (RIL) eastern offshore KG-D6 field hits peak output.

India's indigenous gas production is currently around 143 mmscmd, of which around 42 per cent comes from RIL's Krishna- Godavari Basin D6 fields, a government official said.

"An increase of around 9 mmscmd is expected in 2011-12 from (state-owned) Oil and Natural Gas Corp's (ONGC) marginal fields," he said. ONGC currently sells about 54 mmscmd of gas.

In 2012-13, RIL will ramp up production by 20 mmscmd to hit a peak output of 80 mmscmd from the KG-D6 fields. Another 8 mmscmd is expected to come from Gujarat State Petroleum Corp's (GSPC) KG basin field.

Domestic production will remain at around 180 mmscmd till 2015-16, when ONGC is expected to bring  its KG basin gas finds into production. ONGC estimates production of 25-30 mmscmd of gas from its KG fields by the year 2016.

Together with imported liquefied natural gas (LNG), the availability of natural gas in the country currently stands at 167.80 mmscmd.

The official said the power sector's current requirement of gas is around 77.44 mmscmd and it would need another 15.59 mmscmd in 2011-12 and 60 mmscmd each in 2012-13 and 2014.

Similarly, gas demand from fertiliser units is 39.61 mmscmd, which will rise by 3.43 mmscmd in 2011-12, 13.44 mmscmd in 2012-13 and 46.78 mmscmd in 2013-14.

Most of the domestically produced gas is priced at $4.2 per million British thermal units (mmBtu). LNG imported under long-term agreements is sold at $6.53 per mmBtu, while the price of spot cargo presently varies in the range of $5.40 -9.4 per mmBtu.

RIL currently produces 60 mmscmd of gas from its KG-D6 fields and can hit the peak of 80 mmscmd only after it drills additional wells, the official said.

An Empowered Group of Ministers (EGoM) has given fertiliser plants the highest priority in the usage of KG-D6 gas, followed by LPG extraction plants, while gas-based power plants are third on the list.

These are followed by city gas distribution (CD) entities for supply to domestic and transport sectors, steel plants, petrochemical units, refineries and captive power plants.