India will have to meet its increasing demand for natural gas through LNG imports, with domestic production forecast to decline, oil minister S. Jaipal Reddy said.
"As domestic gas availability is projected to decline in the next two to three years, the additional demand will have to be primarily met through imported LNG," Reddy said in a written to the upper house of parliament.
Natural gas production from the eastern offshore KG D6 block, which is operated by Reliance Industries, is projected to fall to 24 million cu m/day in the 2013-14 fiscal year compared with 28 million cu m/d in the current financial year. It is forecast to fall further to 20 million cu m/d in 2014-15. India's financial year runs from April to March.
Total domestic gas production for the current fiscal year is forecast to reach 104 million cu m/d, which includes production from the fields operated by Oil and Natural Gas Corp. The figure will increase marginally to 105 million cu m/d in 2013-14 and to 112 million cu m/d in 2014-15, the minister said. These figures compare with domestic supply of 120 million cu m/d in June 2011, with LNG imports averaging 46 million cu m/d, the minister said.
The projected additional demand over and above June 2011 consumption of 166 million cu m/d would be 254.2 million cu m/d in the current financial year, 284.27 million cu m/d in 2013-14 and 356.16 million cu m/d in 2014-15, the minister said.
India's LNG imports are forecast to increase as the country's LNG terminal capacity is expected to reach 50 million mt/year by 2017 from around 14 million mt/year at present, Reddy said in March.
Petronet LNG, the largest of India's two incumbent LNG terminal operators and importers, ran its 10 million mt/year nameplate capacity terminal at Dahej in Gujarat, western India, at 107% in 2011-12. Petronet is working on increasing terminal capacity at Dahej to 15 million mt/year and is also expected to commission its 5 million mt/year Kochi terminal at the end of this year.
Shell is expanding capacity at its Hazira terminal, also in Gujarat, to 5 million mt/year from 3.6 million mt/year to meet growing LNG demand.
Source: Platts