The petroleum ministry is revising its demand and supply projections for natural gas in the wake of indications that the country can reach self-sufficiency in the fuel over the next three to four years.
The ministry's move can have major implications for the country's liquefied natural gas import programme.
The natural gas working group for the Tenth Five Year Plan had indicated that the country's domestic production of the gas would be 85.76 million standard cubic metres per day (mmscmd).
However, the recent gas discoveries in the Krishna-Godavari basin and other areas and the prospects of more such finds have changed the scenario considerably.
The working group had apparently made its assessment before Reliance announced its gas find in the Krishna-Godavari basin.
Avinash Chandra, director-general of hydrocarbons, recently said Reliance would produce 45 mmscmd of gas from 2006-07. He added that the total domestic production of natural gas would go up from the current 70 mmscmd to 142 mmscmd in 2006-07, with Reliance contributing a major part.
The working group had estimated that in 2006-07 the domestic gas demand could be around 135-150 mmscmd. This would imply that the domestic production of natural gas would be able match the domestic demand.
However, even these estimates did not take into consideration the huge potential of the Krishna-Godavari basin. Both Reliance and the Oil and Natural Gas Corporation are upbeat about their prospects of striking more gas.
Industry sources said if the 5 million tonnes of LNG imports by Petronet LNG, which were expected to start by the end of the year, were also taken into consideration, the country might have a surplus of gas.
As no worthwhile investment is foreseen in the power and fertiliser sectors it will mean that the imported LNG will have to be sold to small users. This will require heavy expenses in laying pipelines for the transport of the gas.
In fact, a scenario might emerge wherein the country would be importing costly LNG, while the inexpensive domestic gas would go a-begging.
