Wednesday, July 8, 2009

India's Gas Profile Rising

China's side-kick Asian tiger, "little" India, is a rising economy seen by many as gaining a thirst for oil similar to the leading, and rising protagonist partner. This picture is an envisioned nightmare to envioronmentalists, who fear one day, this car will multiply as if the Hindu Goddess Parvati herself started birthing these out:

India's not a big oil producer (660,000 bpd), but her natural gas production is demonstrating surprise rise. From Business-Standard:

Consider this: While India’s current oil production is around 660,000 barrels a day, that of gas has touched 676,000 barrels of oil equivalent a day. Reliance Industries Ltd (RIL), which has started pumping natural gas from its deepwater discovery in the Krishna Godavari (KG) basin, alone accounts for around 35 per cent of this. Before production from the D6 oilfield at the KG basin started on April 2 this year, the total gas production was 500,000 barrels of oil equivalent a day, which met only 55 per cent of the country’s demand.

P M S Prasad, RIL’s president, petroleum business, said the company was currently producing around 28 mmscmd, which is approximately 176,000 barrels of oil equivalent a day. “Once gas production from the KG D6 reaches the planned production level of 80 million standard cubic metre a day (mmscmd) — about 528,000 barrels a day of oil equivalent — the total gas production in the country would be about 1.5 times domestic oil production,” Prasad said.

This could still be quite a conservative estimate. Former Director General of Hydrocarbons Avinash Chandra said RIL had made several other discoveries in the
same block and as and when they came on stream, the combined output would be
much higher than 80 mmscmd.


Coal bed methane production by Great Eastern Energy, Essar and ONGC-CIL in Asansol – Durgapur region in West Bengal and in Jharia will also bring a significant change.

Compare this with the crude oil scenario. The projected increase would come only from Cairn’s oil find in Rajasthan besides the MA field of RIL. Rakesh Jain, general manager (Energy) at Feedback Ventures, said the increase in crude oil production was not keeping pace with the gas output. This is a direct result of ageing oilfields and new discoveries being more in gas than in crude oil though the two are found together.

Official figures prove that. Director General of Hydrocarbons VK Sibal, who heads the country’s oil and gas exploration and production regulatory body, said in the production sharing contract (PSC) regime, 106 discoveries had been made
so far, out of which 43 were oil discovery and 63 gas discoveries. These 106 discoveries did not cover the discoveries made by national oil companies in the
nomination blocks.

Going forward, the share of natural gas in the domestic energy basket would continue to rise. “In 2008-09, gas production at 32.481 bcm (214 million barrels of oil equivalent) in the country was marginally less than the oil production at 33.507 million tonne (245 million barrels). However, with gas from deepwaters in the KG basin by RIL, the gas production in the country is expected to exceed the oil production in the current year, Sibal said.

While these are projections, the actual production is a clear signal to the future scenario. The latest figures released by the ministry of petroleum and natural gas show that during the first two months of the current fiscal, domestic crude oil production stood at 40.3 million barrels, with natural gas production only a tad behind at 5.67 billion cubic metre (bcm), translating into around 37.4 million barrels of oil equivalent.

The sharp rise in natural gas production means that the energy consumption scenario is also expected to see a sea-change. The current share of natural gas in India’s total primary energy consumption is currently only 8-9 per cent
compared to the global average of 24 per cent. Prasad cited analyst reports to say that RIL’s 80 mmscmd of gas could lead to 3 per cent savings in India’s import bill.

Analysts said with the country importing 70 per cent of its crude oil requirement of about 100 million tonne, increased production of natural gas would obviously see a change in the user pattern, especially among industrial users. A case in point is the switchover seen in the fertiliser sector. Following the availability of gas from D6, fertiliser companies moved from naphtha, a refinery product derived from crude oil, to natural gas.

- Brewskie


  1. I don't know why, but it seems like natural gas is being discovered everywhere in large volumes. According to the spokesman for CLNE, the European carmakers already sell a slew of NG models. Maybe India will go the same way.
    So who buys oil in 20 years?
    My guess is that the doomers migrate soon to the AGW scene, where the doom argument cannot be easily refuted (even if it may not be true).
    It just seems ever more clear the Oil Era may end, but with a whimper, not a bang. So I drive a PHEV or CNG car. That is doom? B Cole

  2. B Cole,

    I eventually plan to do a post on NGV projects being conducted throughout the world...

    AGW? I always thought they would first hunker down, sit in front of the boob tube, and watch pseudo-documentaries on the History Channel about the Mayan 2012 doom clock. Or kill time watching "Life After Humans."

    Matt Simmons makes god piles of money stoking doom; I shoulda hooked up with Big Pharma, drove this scheme, and make piles of money selling Xanax.

    The publishing industry has long known idiots are profitable.