Gas production to rise by two-thirds over five years: Oil ministry

The rise is expected to come from ONGC new developments as well as from Oil India and other shared contracts

India’s domestic gas production is set to rise by two-thirds from 100 million standard cubic metres per day (mscmd) in the current financial year to 163 mscmd, or 59 billion cubic metres (bcm), over the next five years through March 2019.

The petroleum ministry has informed the power ministry about the estimated jump in production at a time when there has been a steep drop in domestic output, leaving 24,000 Mw of gas-based power capacity stranded. The two ministries are also working on a strategy to pool gas prices, to resolve differences between stakeholders in oil and power sectors over the new gas price.

India’s domestic production fell 13 per cent from 111 mscmd in 2012-13 to 97 mscmd the previous financial year (2013-14). Output is expected to pick up marginally to 100 mscmd (or 36 bcm) in the current financial year, including 24 bcm from state-run Oil and Natural Gas Corporation (ONGC), 2.8 bcm from Oil India Limited (OIL) and 9.7 bcm from production sharing contracts (PSC) regime blocks.

The bulk of the additional gas would come from ONGC’s ramp-up in output from the 24 bcm in the current financial year to 35 bcm by 2019, on the back of development of the C-26 cluster next financial year, the Daman offshore block, additional production in east coast from deepwater wells of the G1 field and from commissioning of Nelp  (New Exploration Licensing Policy) block KG-98/2 in the Krishna Godavari basin after 2017.

OIL is expected to increase production from the current 2.8 bcm to 4 bcm by 2018-19. Production begins from the Baghjan field in Assam next financial year and incremental output will be from Nelp blocks in the northeast and KG-basin in 2018-19.

The PSC regime covers production from pre-Nelp exploration blocks as well as Nelp blocks. According to the petroleum ministry, no incremental gas production is estimated from pre-Nelp blocks in the next three years. “The major fields under the pre-Nelp regime, such as Panna-Mukta, Tapti, Hazira and Ravva are matured and ageing, and production from these fields are under natural decline,” the ministry has said.

In the case of Nelp blocks, gas is being produced from D1, D3 and MA fields in Reliance Industries Limited (RIL)-operated KG-DWN-98/3 (KG-D6) block. At present, 13 of 25 wells in the D1, D3 and MA fields are closed due to waterlogging, sand ingress and pressure depletion issues. The block produced 12.9 mscmd  between April and July in the current financial year. Production is expected to rise from 4.6 bcm in the current financial year to 12 bcm in 2018.

The petroleum ministry has clarified to the power ministry a part of the additional production from Nelp blocks over the next two years would have to be utilised to meet the shortfall in supplies to the priority fertiliser sector below the level of 31.5 mscmd, as decided by an Empowered Group of Ministers last year. The remaining volumes would then be supplied to the power sector.