Dwindling natural gas resources and supply has long been a key problem of the country's energy mix. And it looks like the country's indigenous supply is not likely to pick up in the coming times. This can be seen from the total demand and supply projections (without RLNG) by Oil and Gas Regulatory Authority (OGRA) in its State of Regulated Petroleum Industry Report 2016-17, which shows that the natural gas situation is bleak without the import of RLNG.
Natural gas demand where the power sector continues to be the key consumer with 43 percent share (including captive power) in FY17 is projected to grow at a CAGR of around two percent over the next 13 years (till 2030), while the supply is projected to fall by over seven percent on average over the same time period. In simple terms, the shortfall in gas is expected to reach 3,999 million cubic feet per day (mmcfd) by FY20 and the gap will reach 6,611 mmcfd without imported gas by FY30. The total gas supply in FY17 including imported RLNG, was 4,131 mmcfd.
The report suggests that the possible gap (as shown in the illustration) can be bridged via incentivising the exploration and production sector to enhance indigenous gas production, import of LNG and, import of interstate natural gas (through development of cross-country gas pipelines). While the government has been successful in bringing RLNG into the system (barring the controversies and the mysteries surrounding RLNG), enhancing the local supply and development of cross-country gas pipeline have not taken any progressive steps lately.
While there have been new discoveries by the E&P sector players, most of them have been of oil and condensate with little success ratio for natural gas even with a better petroleum policy that incentivises additional gas production. On the trans-boundary pipeline progress, the two key projects (IP and TAPI) have also met inordinate delays.
Coming to the only success, imported RNLG, which has made its place in the current energy mix with a share of around 16 percent in the gas supply and is a source of hope for the ballooning gas consumption, has had its fair share of criticism (refer to ‘The LNG mystery' published on January 25, 2018). And now the deal is embroiled in a petition taken up by the Supreme Court has taken up a petition.