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Production versus Consumption of Fossil Fuels India's energymix comprises of both nonrenewables

Paper type: Essay
Pages: 7 (1515 words)
Categories: India,Natural Gas,Nature,Resources
Downloads: 7
Views: 1

1. Production versus Consumption of Fossil Fuels. India’s energy-mix comprises of both non-renewables like coal, petroleum and natural gas and renewable energy sources such as hydro, wind, solar, biomass, cogeneration bagasse etc. While oil prevails in its contribution to the total primary energy demand on global scale, coal continues to dominate the Indian energy basket. However, India is forced to rely on imports due to severe scarcity in domestic energy resources. From Figure 3 below, it is evident that demand-supply gap is widening day-by-day and is apparent in all three primary forms of energy.

History of Natural Gas in India2. First Commercial Discovery. The first commercial discovery of oil and natural gas in India was made in 1889 in Digboi, Assam. However, the Natural Gas Industry gained significance only in the 1970s, after the discovery of large reserves in the South Basin fields by Oil and Natural Gas Corporation Limited (ONGC) which, at present, is the largest crude oil and natural gas company in India, contributing around 70% to Indian domestic production.

3. Implementation of New Exploration License Policy (NELP). The exploration activities in India were earlier carried out only by the National Oil Companies (NOC) like ONGC & Oil India Limited (OIL) under nomination regime. However, with the conceptualisation of NELP by Government in 1997-98, 100% FDI in exploration was allowed in order to provide an equal platform to both public and private sector companies in exploration and production of hydrocarbons. This has been now replaced with Hydrocarbon Exploration and Licensing Policy (HELP) in early 2016 by the Modi government. Aimed at incentivising domestic production with a uniform licensing model, HELP offers pricing and marketing freedom for hydrocarbons produced under the new contractual and fiscal regime.4. First Import of LNG. To address the rising gap between resources and demand, the Government decided to import natural gas through LNG route in early nineties. Petronet LNG Ltd. (PLL) was formed in 1997 to develop the first LNG importation project. Gaz de France, a French natural gas company, was chosen as a strategic partner in early 1998 and based on the studies, Dahej and Kochi were identified for setting-up the first two LNG receiving terminals. RasGas, an LNG producing company in Qatar was selected and a 25 years LNG supply contract was signed in Jun 99 for suppling 7.5 MMT of LNG every year. The first supplies of LNG from Qatar was received at Dahej in 2004 post setting up of an LNG terminal. Ever since, the LNG imports have been on a constant rise in order to meet the growing demands.Key Government Agencies in Gas Sector5. MoPNG is the apex body at the central level which is responsible for the exploration, production, refining, distribution, marketing, import, export, and conservation of petroleum, natural gas, petroleum products, and liquefied natural gas in India. Other organisations functioning under MoPNG, who play a pivotal role in the Indian gas industry are enumerated below:-(a) Gas Authority of India Ltd (GAIL). Created in 1984 as a PSU to promote gas use and develop midstream and downstream gas infrastructure. (b) Directorate General of Hydro Carbons (DGH). Instituted in 1993 and largely manages the awarding and implementation of NELP and also responsible for reviewing of the reservoir performance of producing fields. (c) Petroleum and Natural Gas Regulatory Board (PNGRB). Established in Mar 06 under the Petroleum & Natural Gas Regulatory Board Act 2006, which provides the legal framework for the development of the natural gas pipelines and city or local gas distribution networks. The mandate of PNGRB is to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas.(d) Petroleum Planning and Analysis Cell (PPAC). Responsible for periodically revising natural gas prices under the guidelines set in 2014. Exploration and Production of Natural Gas in India6. Sedimentary Basins of India. The map placed at Appendix Q outlines the concentration of the sedimentary basins with their prospective categories. There are a total of 26 sedimentary basins both on land and off-shore, which have an area of approximately 3.14 million sq. kms. These basins have been divided into four categories based on their degree of prospect for future productivity, namely established, identified but no commercial production achieved so far, geologically prospective and lastly, basins which are potentially prospective by analogy with similar basins in the world. 7. Natural Gas Reserves and Production. As depicted in Table 4 below, the estimated reserves of natural gas in India stood at 1339.6 Billion Cubic Meters (BCM) as on Apr 18 as against 1289.7 BCM in Apr 17, showing an increase by 3.9%, with the largest reserves located in the Eastern Offshore and the Western Offshore. The gross production of natural gas in 2017-18 was 32.7 BCM, an increase of 2.5% from the previous fiscal. 78.5% of natural gas production is by ONGC and OIL from nomination regime and remaining 21.5% of natural gas production is by private/ JVs companies from Production Sharing Contract (PSC) regime. The domestic production had peaked in 2010-11 with 52.2 BCM due to the increased production in the Krishna-Godavari basin gas fields.8. Signing of Production Sharing Contracts (PSC). So far nine rounds of NELP bidding have been carried out successfully by the DGH spanning 1999-2012, and PSC have been signed for a total of 254 exploration blocks, including 81 deep water ones. 9. Increase in Production for First Time in Seven Years. After a steady decline since peaking in 2010-11, there has been an increase in the domestic production of natural gas in 2017-18, showcasing positive trends for the first time in seven years. The consumption had peaked in 2011-12, and has again been on a rise since 2016-17. From the data, it is also clearly understood that the LNG imports is on a constant growth, depicting the country’s energy requirement. It is pertinent to mention that the shortfall in production is mainly attributed to less than planned production due to evacuation constraints, natural decline and underperformance of certain gas fields including the closure of few wells and also due to delay in grant of Petroleum Mining Lease (PML) for certain wells. Transportation Pipeline Infrastructure of India10. Pipeline Network. The first natural gas pipeline of the country, the HVJ pipeline connecting Hazira and Jagdishpur via Vijaipur, was commissioned and energised by Jul 87, which helped natural gas industry to gain further momentum. Natural Gas is primarily sourced from KG-D6, Mumbai offshore, Cambay Basin, Ravva Offshore, KG Basin, Cauvery basin and through import of LNG, which is regasified and transported through pipelines. India has an exclusive reputation of having one of the worst pipeline footprints per square kilometer of land at 0.003 km of pipeline compared to the UK and the US with 1.08 and 0.19 km respectively. 11. Designed Capacity and Present Throughput. As of 01 Apr 18, the total length of the gas pipeline network in the country is 16770 km. The three major pipeline entities engaged in natural gas transportation as depicted below in Table 5 are Gas Authority of India Ltd. (GAIL), Reliance Gas Transportation Infrastructure Ltd. (RGTIL)/ Reliance Gas Pipeline Ltd. (RGPL) and Gujarat State Petroleum Corporation Ltd. (GSPL). The cumulative design capacity of natural gas pipeline network is 369 MMSCMD while the maximum gas throughput achieved in 2017-18 was 161 MMSCMD. As part of the expansion plans, 11377 kms of pipelines are either being laid or at advanced stages of bidding. 12. Map placed at Appendix R shows the geographical spread of natural gas distribution in the country along with the existing, under construction and proposed pipelines.Distribution and Sale of Natural Gas13. Pricing. The latest guidelines for natural gas pricing was issued by the Government in 2014. It is applicable to all gas except where prices have been fixed contractually for a certain period of time. Re-gasified LNG is priced based on different supply contracts, long and short-term supplies as well as spot prices. Short-term supplies and spot cargos carry substantially higher prices than domestically produced gas and long-term supply contracts for LNG. A 40% subsidy is available for gas supplied by ONGC/ OIL in North Eastern Region and also includes private operators to incentivize exploration and production. The periodicity of price determination/ notification is half yearly and is undertaken by PPAC. The last price notification by PPAC was undertaken for the period 01 Oct 18 to 31 Mar 19 and is currently fixed at US $ 3.36/MMBTU on Gross Calorific Value (GCV) basis. 14. Distribution through ‘Gas Utilisation Policy’. The domestically produced gas is allocated by the Government through its Gas Utilisation Policy’, under which the produced gas is first distributed to certain priority’ sectors before it is released for sale to the wider Indian market. Gas is first released to Tier-1 consumers (Fertiliser plants, LPG extraction plants, Grid-connected power plants and City Gas for households and transport) and then to Tier-2 consumers (Steel, Refineries & Petrochemical plants, City Gas for Industrial & Commercial Consumers, Feedstock or Fuel, etc.). Since Tier-1 industries account for 86% of domestic consumption, this policy is intended to benefit them.

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Production versus Consumption of Fossil Fuels India’s energymix comprises of both nonrenewables. (2019, Aug 20). Retrieved from https://studymoose.com/production-versus-consumption-of-fossil-fuels-indias-energymix-comprises-of-both-nonrenewables-essay

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