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Report No. 6 of 2015 - Performace Audit on Supply and Infrastructure Development for Natural Gas of Union Government, Ministry of Petroleum and Natural Gas

Date on which Report Tabled:
Tue 05 May, 2015
Date of sending the report to Government
Government Type
Union
Union Department
Commercial
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Sector Power & Energy

Overview

Natural Gas (NG), one of the cleanest, safest and most useful of fossil fuels is being increasingly used in various sectors like fertilizer, power, city gas, steel and other heavy industries. Primary consumers of NG in the country are in the power and fertiliser sectors (62 per cent) which are critical to economic development of the country. The Working group on Petroleum and Natural Gas for the XI and XII Plan anticipated increase in requirement of NG in the fertilizer sector to meet expected increase on account of conversion of liquid fuel based plants to NG/re-gasified LNG (R-LNG) based plants, expansion of plants, revival of closed units, setting up of new plants etc. Similarly, increase in requirement of NG was expected to meet the projected power generation.

Demand for NG in the country was far in excess of its supply from domestic as well as imported sources taken together and gap between demand and supply was 77 Million Metric Standard Cubic Metre per day (mmscmd) in 2009-10. Consequent upon reduction in production from domestic fields from 2011-12, this gap between demand and supply widened further to 250 mmscmd in 2013-14. As domestic demand was far in excess of indigenous production and there were very few new domestic sources available to cater to additional demand, options available to meet the demand were import of NG through transnational pipelines and import of Liquefied Natural Gas (LNG). Government of India (Gol) initiated steps for import of gas through Trans-National pipelines (1989) and for import of LNG (1995) anticipating shortfall in domestic production.

With a view to having a long term policy on Hydrocarbons, a Group of Ministers (GoM) was set up in 1999 for working out a specific framework for developing "India Hydrocarbon Vision- 2025". The report submitted by GoM (2000), inter alia, set objectives for NG sector which included steps to ensure adequate availability of a mix of domestic gas, gas imported through pipelines and Re-gasified Liquefied Natural Gas (R-LNG). It suggested various initiatives for import of gas from neighbouring and other countries, expedite setting up of a regulatory framework and encourage domestic companies to participate in LNG chain.

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