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While the natural gas production in the country almost doubled in 2009, the trunk pipeline capacity would increase by about 50 per cent to 16,323 km, in December 2012. “The gas market is driven by a pipeline network. That is a must. We do not have a country-wide gas pipeline network and grid,” said A K Balyan, chief executive officer and managing director, Petronet LNG Ltd (PLL). The company, promoted by government-owned oil and gas companies, is the biggest importer of natural gas in the country. It is also the only domestic company to have two long-term LNG contracts. Balyan pointed out that no long-term contract has been signed anywhere in the world after PLL signed a contract with Australia for import of LNG from the Gorgon field last year, along with a similar contract signed by China for gas from the Australian field. Balyan said they faced pipeline constraint in the past to push regassified LNG and agreed that pipeline infrastructure, besides pricing was a problem for the domestic LNG industry. Balyan, who joined PLL recently and has been associated with Oil and Natural Gas Corporation, the second biggest producer of gas in the country, recollected that in the 1980s, ONGC had proposed a national gas grid which was a “futuristic” proposal then. The country still does not have a national grid in place.
Part of the problem is expected to be taken care of by 2012. The Petroleum and Natural Gas Regulatory Board (PNGRB), which has been empowered to issue authorisation for trunk pipelines almost three years after it was formed, has planned five more trunk pipelines, in addition to the nine scheduled to be completed by December 2012. “In the next five years, with the completion of these five trunk pipelines, the country will have a virtual national gas grid and all sources and consumption centres will get connected,” said PNGRB Chairman L Mansingh. India’s trunk pipeline capacity will be less than 30 per cent of Pakistan’s pipeline network of 56,400 km, even after the nine new pipelines become operational in 2012. This is despite the fact that the neighbouring country’s gross domestic product is roughly half the size of India’s. Despite the biggest global gas field coming into production last year, the share of natural gas in the total energy basket in India remains a paltry 10 per cent, compared to a global average of around 25 per cent. The potential demand is, therefore, immense. “The falling gas prices, plus the availability of extra output, such as from India’s Krishna-Godavari field, have raised enthusiasm for gas, and led to increasing use of the fuel variety in both China and India. China as a gas user is already as big as OECD countries such as Germany or the UK, and along with India can be expected to see ongoing increases in consumption, although coal will remain the major energy source in both countries,” said Nobuo Tanaka, IEA Executive Director. The condition for growth in the Indian gas market, as Balyan put it, would still be “an aggressive gas network”.
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