RIL gas find casts shadow over new projects

Natural gas production stands at 66.28 mmscmd.

“I don’t feel there would be any adverse impact (on liquefied natural gas projects). The first LNG shipment will arrive by December 2003 while the gas from KG-basin will take three more years to become commercial,” petroleum minister Ram Naik said.

India’s demand for natural gas, which constitutes eight per cent of the total energy consumption, is growing at the rate of 6.1 per cent per annum. The share of gas in energy consumption would reach 20 per cent by 2024-25 against the present world average of 23 per cent.

However, state-run Indian Oil, which in consortium with Petronas of Malaysia and British Petroleum is planning a 2.5 million tonnes LNG import terminal at Kakinada in Andhra Pradesh, is re-assessing the viability of the project.

“We are re-assessing the viability in light of this gas discovery. Besides, the potential to double Tapti field output and discoveries by Cairn Energy has led us to rethink,” IOC chairman MS Ramachandran said. Naik insists that only two of the over a dozen LNG projects are being seriously pursued and “they will find customers.”

Petronet LNG Ltd (PLL), the joint venture of public sector oil companies, will complete its 5 million tonnes (17 mmscmd) LNG import project at Dahej in Gujarat by December 2003 while Royal Dutch Shell would bring in 2.5 million tonnes of LNG at Hazira, also in Gujarat, by mid 2004.

“At present, there is a gap in demand and supply with only 50 per cent consumers being supplied gas. This (new gas find) will substantially add in reducing the gas,” Naik said.

Naik’s optimism over viability of at least two LNG projects is despite his own assertion that more oil and gas lay in the deepsea blocks awarded recently.