PETROLEUM AND ENERGY SUPPLY NATURAL GAS 4
AT A GLANCE
The production of crude oil declined marginally during the year, from 37.9 million tonnes (MT) in 2012/13 to 37.8 MT in 2013/14. On the other hand, imports of crude oil increased Introduction in terms of both quantity and value. The total refining capacity remained unchanged at 215 MT, The domestic production of both oil and gas declined while refinery throughput increased by nearly 3 MT during in 2013/14. Although the total domestic crude oil the year. production fell marginally, production increased only in the fields operated by Cairn India in Rajasthan. Both diesel and petrol prices have now been decontrolled. The overall natural gas production, in particular, fell Hence, no more under-recoveries are being incurred for for the third year in a row due to the falling production both these fuels. from the RIL-BP-Niko’s KG-DWN-98/3 (popularly The domestic production of natural gas decreased during known as the KG-D6) block. Consequentially, crude the year to just over 35.4 billion cubic metres (BCM) from oil imports rose; however, natural gas imports in 40.7 BCM in 2012/13. the form of liquefied natural gas (LNG) marginally The PAHAL-Direct Benefit Transfer for LPG (DBTL) decreased. Further, domestic refining capacity Consumers Scheme was launched in 54 districts across remained unchanged, although refining throughput India in November 2014. This will be launched in the rest of increased marginally by 3 million tonnes (MT). the country from 1 January 2015. After petrol prices were deregulated in 2010, diesel prices stand deregulated as of October 2014. As a consequence, oil marketing companies (OMCs) are not incurring under-recoveries on the sale of diesel anymore. Additionally, a new natural gas pricing structure has now been put in place. The new pricing formula is a modification of the Rangarajan Committee formula, the implementation of which was stalled due to the Lok Sabha Elections in 2014.
Oil Crude oil supply Domestic production Oil production in India in 2013/14 marginally fell to 37.8 MT from 37.9 MT in 2012/13 (Table 1). Production from the offshore fields of Oil and Natural Gas Corporation (ONGC) continued its declining Energy supply
trend. Although the decline from the previous year Table 1 Trend in onshore–offshore crude oil production (in MT) is marginal, ONGC’s offshore production has Year Onshore Offshore Grand dropped 11.6% since 2009/10. Production has fallen total ONGC OIL Priva- Total ONGC Priva- Total in the onshore and offshore fields of ONGC and Oil te/JV te/JV India Ltd (OIL), as well as in private offshore fields. 2013/14 (P) 6.7 3.5 9.4 19.6 15.5 2.6 18.2 37.8 ONGC, however, intends to ramp up production by 2012/13 6.9 3.7 8.8 19.4 15.6 2.8 18.4 37.9 23% starting 2014/15 until 2019/20. It plans to use Improved Oil Recovery (IOR) and Enhanced Oil 2011/12 7.4 3.9 6.8 18.0 16.3 3.7 20.1 38.1 Recovery (EOR) techniques in the Mumbai High and 2010/11 7.5 3.6 5.4 16.4 17.0 4.3 21.3 37.7 Heera fields (The Hindu 2014). 2009/10 7.5 3.6 0.7 11.8 17.3 4.5 21.9 33.7 Private onshore production, on the other hand, 2008/09 7.6 3.5 0.2 11.3 17.8 4.4 22.2 33.5 has improved significantly from 0.7 MT in 2009/10 to 9.4 MT in 2013/14, increasing for the fifth year in 2007/08 7.9 3.1 0.2 11.2 18.0 4.9 22.9 34.1 a row. This has made up for the declining production 2006/07 8.1 3.1 0.2 11.3 18.0 4.7 22.7 34.0 elsewhere. Table 2 provides the production of crude 2005/06 8.1 3.2 0.1 11.4 16.3 4.5 20.8 32.2 oil by region. 2004/05 8.3 3.2 0.1 11.6 18.2 4.2 22.4 34.0 Import of crude oil 2003/04 8.4 3.0 0.1 11.5 17.7 4.2 21.9 33.4 India imported 189.2 MT of crude oil in 2013/14, 2002/03 8.5 3.0 0.1 11.5 17.6 4.0 21.6 33.0 which constituted over 83% of the total domestic 2001/02 8.6 3.2 0.1 11.9 16.1 4.1 20.1 32.0 supply in that year. The share of imports has risen 2000/01 8.4 3.3 0.1 12.0 16.6 3.8 20.4 32.4 from 74% in 2004/05. JV – joint venture; MT– million tonnes; OIL – Oil India Ltd; ONGC – Oil and Natural India’s dependence on the Middle East for its oil Gas Corporation; P – provisional declined in relative terms, even though total import Note The production figures have been rounded off to one decimal place. marginally increased to 115.9 MT in 2013/14 from Source MoPNG (2014b); TERI (2014a)
Table 2 Production of crude oil by region (in MT) Year Onshore Offshore Total Arunachal Andhra Pradesh/ Assam/ Gujarat Onshore Private/JV Mumbai Offshore Pradesh Tamil Nadu Nagaland /Rajasthan total High total 2013/14 (P) 0.1 0.6 4.7 14.2 19.5 2.7 15.5 18.2 37.7 2012/13 0.1 0.5 4.9 13.9 19.4 2.8 15.6 18.4 37.8 2011/12 0.1 0.6 5.0 12.3 18.0 3.7 16.3 20.1 38.1 2010/11 0.1 0.5 4.7 11.1 16.4 4.3 17.0 21.3 37.7 2009/10 0.1 0.5 4.7 6.4 11.8 4.5 17.3 21.9 33.7 2008/09 0.1 0.6 4.7 5.9 11.3 4.4 17.8 22.2 33.5 2007/08 0.1 0.6 4.4 6.2 11.2 4.9 18.0 22.9 34.1 2006/07 0.1 0.6 4.4 6.2 11.3 4.7 18.0 22.7 34.0 2005/06 0.1 0.6 4.5 6.3 11.4 4.5 16.3 20.8 32.2 2004/05 0.1 0.6 4.7 6.2 11.6 4.2 18.2 22.4 34.0 2003/04 0.1 0.7 4.6 6.1 11.5 4.2 17.7 21.9 33.4 2002/03 0.1 0.7 4.7 6.0 11.5 4.0 17.6 21.6 33.0 2001/02 0.1 0.7 5.1 6.0 11.9 4.1 16.1 20.1 32.0 2000/01 0.1 0.7 5.2 5.8 11.8 4.0 16.6 20.4 32.4 JV – joint venture; MT – million tonnes; P – provisional Source MoPNG (2014b); TERI (2014)
70 TERI Energy and Environment Data Diary and Yearbook 2014/15 Petroleum and natural gas
Table 3 Quantity of crude oil import by region (in MT) 2011/12 2012/13 2013/14 Middle East 118.6 115.4 115.9 Africa 31.1 29.6 30.4 Asia 3.4 3.3 3.4 South America 14.5 29.8 31.7 Eurasia 1 2.4 2.1 North America 2.3 4.1 5.2 Europe 0 0 0.3 Australia 0.7 0.2 0.4 Total 171.6 184.8 189.4 Source Rajya Sabha (2014)
115.4 MT from the previous year. Imports from South Figure 2 Imports of crude oil and petroleum America, in particular, have increased to 31.7 MT in products vis-à-vis total imports 2013/14 from only 14.5 MT in 2011/12 (Table 3). P – provisional The bill for crude oil imports in 2013/14 was Source RBI (2014) ` 864 875 crore, up 10.2% from ` 784 652 crore in 2012/13 (Figure 1). Because of the depreciation of the rupee and the changing oil prices, while the oil import increased by 3.5% compound annual growth Crude oil pipelines rate (CAGR) in terms of quantity, it increased by India has over 9000 km of crude oil pipelines. 18.2% CAGR in terms of value between 2009/10 and Table 4 lists the details of major pipelines, operators, 2013/14. Figure 2 provides the share of petroleum capacities, and lengths. and crude products in total imports of India. Refining Present capacity and throughput of existing refineries Although India is a net importer of crude oil, it is one of the largest exporters of petroleum products in the world. India became a net exporter of petroleum products in 2001 (EIA 2014), and since 2012, it has the third largest refining capacity in Asia after China and Japan, with a total capacity of 215.07 MTPA in 2013/14 (Table 5). While this refining capacity has not changed since 2012/13, it has increased significantly over time: it was 148.97 MTPA in 2006/07, while it was only 62 MTPA in 1997/98 (see Map 1). While no new refineries have been commissioned since 2012 when Hindustan Mittal Energy Ltd Figure 1 Quantity and value of crude oil imports in (Bathinda, Punjab) and Bharat Oman Refineries Ltd India (Bina, Madhya Pradesh) were commissioned, capacity P – provisional expansion programmes are on at several refineries. Further, new refineries are being constructed Source MoPNG (2014b) at Paradip, Odisha (by IOCL with a capacity of
TERI Energy and Environment Data Diary and Yearbook 2014/15 71 Energy supply
Map 1 Crude oil pipelines and refineries in India Sources TERI (2014a); MoPNG (2014a, 2014b)
72 TERI Energy and Environment Data Diary and Yearbook 2014/15 Petroleum and natural gas
Table 4 Length of major crude pipelines Operator Pipeline Capacity (MTPA) Length (km) OIL Duliajan–Digboi–Bongaigaon–Barauni 8.40 1 193 IOCL Salaya–Mathura–Panipat (including loop lines) 21.00 1 870 IOCL Paradip–Haldia–Barauni 11.00, set to be increased to 15.2 in 2015 1 384
IOCL Mundra–Panipat 8.4 1 194 ONGC Kalol–Navagam–Koyali 8.54 141
HMEL (JV with HPCL) Mundra–Bathinda 9.00 1 017 BORL (JV with BPCL) Vadinar–Bina 6.00 937 Cairn Barmer–Salaya 6.25 591 ONGC Mumbai High–Uran Trunk (offshore) 15.63 204 ONGC Heera–Uran Trunk (offshore) 11.5 81 ONGC 30¢¢ BUT (OIL) (offshore) 6.38 203 BPCL – Bharat Petroleum Corporation Ltd; BORL – Bharat Oman Refineries Ltd; HMEL – Hindustan Mittal Energy Ltd; HPCL – Hindustan Petroleum Corporation Ltd; IOCL – Indian Oil Corporation Ltd; JV – Joint Venture; MTPA – million tonnes per annum; OIL – Oil India Ltd; ONGC – Oil and Natural Gas Corporation Note Smaller pipelines operated by ONGC have not been included in this table. Source TERI (2014a); MoPNG (2014b)
15 MTPA); in Cuddalore, Tamil Nadu (by Nagarjuna blamed on factors such as unplanned shutdowns in Oil Corporation Ltd with a capacity of 6 MTPA); in HPCL’s Visakh refinery and “lower product cracks” Ratnagiri, Maharashtra (by HPCL with a capacity of in BPCL’s Mumbai refinery. 9 MTPA); and in Barmer, Rajasthan (by HPCL with To improve its GRM, the IOCL has been a capacity of 9 MTPA). enhancing its technology to refine cheaper grades of crude oil. Further, it has been trying to diversify its Gross refining margin purchases of crude oil between term and non-term Gross refining margin (GRM) measures the contracts (IOCL 2014). Further, the HPCL credited profitability of refineries. It is the difference between the improved GRM in Mumbai as a result of better the cost of crude oil and the average price realized on the operational performance. finished product. Global GRMs in 2013/14 remained under pressure due to overcapacity, sluggish demand, Petroleum products and increasing crude oil prices, which impacted the profitability of international companies such as Exxon Production Mobil, BP, and Chevron (Forbes 2014). In India, Although refining capacity did not increase during the changes in GRM over 2012/13 were varied: 2012/13, production increased marginally by 3.1 MT HPCL (Mumbai), NRL, CPCL, and MRPL saw an to reach 220.8 MT in 2013/14. The production of improvement in their margins. Five of IOCL’s eight motor spirit or MS (petrol) marginally increased to refineries saw an improvement in the GRM, which led 30.3 MT, while the production of high-speed diesel to an overall improvement of IOCL’s average GRM. (HSD) increased by 3 MT to reach 93.8 MT. The On the other hand, Bharat Petroleum Corporation production of kerosene, on the other hand, decreased Ltd (BPCL), HPCL (Visakh), and RIL experienced by 0.7 MT during the previous year. Liquefied a decline in their refining margins. EOL’s GRM was petroleum gas (LPG) production, which had been similar to the previous year (Table 6). declining for the past few years, increased for the Although rupee depreciation and rising crude oil second year in a row. It increased by 2 MT to reach prices affected Indian refineries, the global increase 10.0 MT in 2013/14. Table 7 contains data on the in product prices neutralized the adverse impact on refining capacities and crude throughput of refineries GRMs (BPCL 2014). The lower GRMs have been in India.
TERI Energy and Environment Data Diary and Yearbook 2014/15 73 Energy supply
Table 5 Installed capacity and crude throughput Refinery and location Refining capacity (MTPA) as on 1 April Refining crude throughput (MT) 2012 2013 2014 2009/10 2010/11 2011/12 2012/13 2013/14 (P) IOCL Guwahati, Assam 1.00 1.00 1.00 1.08 1.12 1.06 0.96 1.02 IOCL Barauni, Bihar 6.00 6.00 6.00 6.18 6.21 5.73 6.34 6.48 IOCL Koyali, Gujarat 13.70 13.70 13.70 13.21 13.56 14.25 13.16 12.96 IOCL Haldia, West Bengal 7.50 7.50 7.50 5.69 6.88 8.07 7.49 7.95 IOCL Mathura, Uttar Pradesh 8.00 8.00 8.00 8.11 8.88 8.20 8.56 6.64 IOCL Digboi, Assam 0.65 0.65 0.65 0.60 0.65 0.62 0.66 0.65 IOCL Panipat, Haryana 15.00 15.00 15.00 13.62 13.66 15.50 15.13 15.10 IOCL Bongaigaon, Assam 2.35 2.35 2.35 2.22 2.01 2.19 2.36 2.33 BPCL Mumbai, Maharashtra 12.00 12.00 12.00 12.52 13.02 13.36 13.08 12.68 BPCL Kochi, Kerala 9.50 9.50 9.50 7.88 8.70 9.47 10.11 10.29 HPCL Mumbai, Maharashtra 6.50 6.50 6.50 6.97 6.64 7.51 7.75 7.79 HPCL Visakh, Andhra Pradesh 8.30 8.30 8.30 8.80 8.20 8.68 8.03 7.78 CPCL Manali, Tamil Nadu 10.50 10.50 10.50 9.58 10.10 9.95 9.11 10.07 CPCL Narimanam, Tamil Nadu 1.00 1.00 1.00 0.52 0.70 0.61 0.64 0.56 NRL Numaligarh, Assam 3.00 3.00 3.00 2.62 2.25 2.83 2.48 2.61 ONGC Tatipaka, Andhra Pradesh 0.07 0.07 0.07 0.06 0.07 0.07 0.06 0.07 MRPL Mangalore, Karnataka 15.00 15.00 15.00 12.50 12.66 12.80 14.42 14.59 RIL Jamnagar, Gujarat 33.00 33.00 33.00 34.42 31.20 32.50 32.61 30.31 RIL (SEZ) Jamnagar, Gujarat 27.00 27.00 27.00 32.74 35.61 35.19 35.89 37.72 Essar Vadinar Gujarat 18.00 20.00 20.00 13.50 14.87 13.50 19.77 20.20 BORL Bina 6.00 6.00 6.00 — – 2.05 5.73 5.45 HMEL Bathinda 9.00 9.00 9.00 – – – 4.90 9.27 Total 213.07 215.07 215.07 192.77 196.99 204.12 219.21 222.50 BPCL – Bharat Petroleum Corporation Ltd; CPCL – Chennai Petroleum Corporation Ltd; HPCL – Hindustan Petroleum Corporation Ltd; IOCL – Indian Oil Corporation Ltd; MRPL – Mangalore Refinery and Petrochemicals Ltd; MT– million tonnes; MTPA – million tonnes per annum; HMEL – Hindustan Mittal Energy Ltd; BORL – Bharat Oman Refineries Ltd; NRL – Numaligarh Refinery Ltd; ONGC – Oil and Natural Gas Corporation; P – provisional; RIL – Reliance Industries Ltd; SEZ – special economic zone Source MoPNG (2014a)
Consumption Imports and exports of petroleum products The total consumption of petroleum products rose The net exports of petroleum products from India marginally to 158.2 MT in 2013/14 from 157.1 MT continued the rising trend in 2013/14. HSD and MS in 2012/13. The overall consumption has increased were two large export products in quantity terms at at a CAGR of 2.8% in the past five years. The 26.5 MT and 15.3 MT, respectively. The exports consumption of LPG and motor spirit increased, while of both these fuels have increased over the past few the consumption of HSD and kerosene decreased. years, except in the case of MS in 2013/14, when Table 8 shows the consumption of different petroleum the exports fell marginally. The imports of LPG products since 2009/10. continued to rise and reached 6.6 MT in 2013/14.
74 TERI Energy and Environment Data Diary and Yearbook 2014/15 Petroleum and natural gas
Table 6 Gross refining margins in ($/barrel) Table 8 Consumption of petroleum products (in '000 tonnes) 2010/11 2011/12 2012/13 2013/14 Consumption 2009/10 2010/11 2011/12 2012/13 2013/14 IOCL (average of eight 5.72 3.63 3.16 4.24 of petroleum (P) refineries) products BPCL (Mumbai) 4.23 1.73 4.67 3.95 LPG 13 135 14 331 15 350 15 601 16 336 BPCL (Kochi) 4.83 3.09 5.36 4.8 SKO 9 304 8 928 8 229 7 502 7 165 HPCL (Mumbai) 4.65 2.82 2.08 5.38 HSD 56 242 60 071 64 750 69 080 68 396 HPCL (Visakh) 5.81 2.95 2.08 1.5 MS 12 818 14 194 14 992 15 744 17 128 CPCL (Chennai) 5.38 4.16 0.99 4.06 Naphtha 10 134 10 676 11 222 12 289 11 305 RIL 8.4 8.6 9.20 8.10 ATF 4 627 5 078 5 536 5 271 5 505 EOL 4.53 4.45 7.96 7.98 LDO 457 455 415 399 386 NRL 15.39 11.97 10.52 12.09 Lubricants 2 539 2 429 2 633 3 196 3 305 and greases MRPL 5.9 5.96 2.45 2.67 FO and LSHS 11 629 10 789 9 307 7 656 6 236 BORL — — 7.00 7.70 Bitumen 4 934 4 536 4 638 4 676 5 007 BORL – Bharat Oman Refineries Ltd; BPCL – Bharat Petroleum Corporation Ltd; CPCL – Chennai Petroleum Corporation Ltd; EOL – Essar Oil Ltd; HPCL – Hindustan Petroleum 6 586 4 982 6 138 10 135 11 756 Petroleum Corporation Ltd; IOCL – Indian Oil Corporation Ltd; MRPL – Mangalore coke Refinery and Petrochemicals Ltd; NRL – Numaligarh Refinery Ltd; RIL – Reliance Industries Ltd Others 5 400 4 569 4 924 5 509 5 956 Source IOCL (2014); RIL (2014); MRPL (2014); NRL (2014); HPCL (2014); BPCL Total 137 808 141 040 148 132 157 057 158 407 (2014); Reuters (2014) ATF – aviation turbine fuel; FO – furnace oil; HSD – high-speed diesel; LDO – light diesel oil; LPG – Liquefied Petroleum Gas; LSHS – low sulphur heavy stock; MS – motor spirit; P – provisional; SKO – superior kerosene oil Table 7 Production of petroleum products (in '000 tonnes) Source PPAC (2014b) Production 2009/10 2010/11 2011/12 2012/13 2013/14 (P) of petroleum Table 9 Imports of petroleum products ('000 tonnes) in products 2013/14 LPG 10 345 9 624 9 554 9 830 10 115 Product 2013/14 Naphtha 18 782 19 309 18 707 18 851 18 420 LPG 6 607 MS 22 554 25 802 27 207 30 120 30 267 Petrol 235 ATF 9 304 9 817 10 061 10 089 11 237 Naphtha 1 026 SKO 8 833 7 898 8 019 8 057 7 412 Kerosene 0 HSD 73 249 77 684 82 929 91 090 93 749 Diesel 84 LDO 472 597 502 400 423 Lubes 1 674 Lubes 950 941 1 027 937 941 Fuel oil 1 283 FO 15 257 18 672 17 722 14 514 12 951 Bitumen 237 LSHS 2 627 1 985 1 711 1 290 472 Others 5 571 Bitumen 4 873 4 446 4 599 4 670 4 785 Total product import 16 718 Others 17 755 19 010 21 955 27 974 29 426 LPG – Liquefied Petroleum Gas Source PPAC (2014c) Total 185 000 195 786 203 994 217 821 220 199 ATF – aviation turbine fuel; FO – furnace oil; HSD – high-speed diesel; LDO – light diesel oil; LPG – Liquefied Petroleum Gas; LSHS – low sulphur heavy stock; MS – Table 9 and Table 10 give the imports and exports of motor spirit; P – provisional; SKO – superior kerosene oil petroleum products in 2013/14, respectively. Source PPAC (2014a)
TERI Energy and Environment Data Diary and Yearbook 2014/15 75 Energy supply
Table 10 Exports of petroleum products ('000 tonnes) in Petroleum product pipelines 2013/14 India has over 14 000 km of petroleum product Product 2013/14 pipelines across the country. Table 11 presents the LPG 227 capacity, length, and throughput of the petroleum pipelines. Petrol 15 247 Naphtha 8 322 Pricing of petroleum products Aviation turbine fuel 5 745 The government continues to subsidize kerosene Kerosene 15 and domestic LPG. In 2011, it launched the Direct Diesel 26 469 Benefit Transfer scheme for Kerosene on a pilot scale Light diesel oil 30 in Alwar, Rajasthan to reduce leakages. In 2013, the scheme for LPG was launched in 20 districts and Lubes 20 linked to Aadhar (UID–Unique Identification) and Fuel oil 6 159 then rapidly scaled up to 291 districts. While the Bitumen 95 pilot scheme for kerosene was on a small scale with Others 5 535 no expansion (TERI 2014b), the transfer scheme for LPG was suspended in March 2014 primarily due Total export 67 864 to issues arising out of low penetration of Aadhar in LPG – Liquefied Petroleum Gas Source PPAC (2014c)
Table 11 Length of petroleum product pipelines Capacity (MTPA) (as on 1 April) Length (km) (as on 1 April) Throughput (thousand tonnes)* 2013 2014 2013 2014 2012/13 2013/14 LPG pipelines IOCL 0.7 0.7 274 274 499 490 Panipat–Jalandhar 0.7 0.7 274 274 499 490 GAIL 3.83 3.83 2 038 2 038 3 130 3 140 Jamnagar–Loni 2.5 2.5 1 415 1 415 2 330 2 200 Vizag–Secunderabad 1.33 1.33 623 623 800 940 Total LPG 4.53 4.53 2 312 2 312 3 629 3 630 Product pipelines (onshore) IOCL 36.16 36.39 6 358 6 358 27 595 26 722 Koyali–Ahmedabad 1.1 1.1 116 116 538 673 Koyali–Sanganer 4.6 4.6 1 287 1 287 3 441 3 428 Koyali–Ratlam 2 2 265 265 844 1 137 Koyali–Dahej 2.6 2.6 197 197 870 328 Barauni–Kanpur 3.5 3.5 745 745 2 535 2 588 Haldia–Mourigram–Rajbandh 1.35 1.35 277 277 1 840 1 843 Haldia–Barauni 1.25 1.25 525 525 1 146 1 021 Guwahati–Siliguri 1.4 1.4 435 435 1 711 1 727 Panipat–Bathinda 1.5 1.5 219 219 1 426 1 323 Panipat–Rewari 1.5 2.1 155 155 1 615 1 487 Contd...
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Table 11 LengthContd... of petroleum product pipelines Capacity (MTPA) (as on 1 April) Length (km) (as on 1 April) Throughput (thousand tonnes)* 2013 2014 2013 2014 2012/13 2013/14 Panipat–Ambala 3.5 3.5 434 434 2 654 2 393 Panipat–Delhi–Jalandhar ** 182 189 1 070 1 937 Mathura–Delhi–Bijwasan–Panipat 3.7 3.7 258 258 2 676 1 784 Mathura–Tundla 1.2 1.2 56 56 310 300 Mathura–Bharatpur 21 21 521 453 Chennai–Trichy–Madurai 2.3 2.3 683 683 2 278 2 304 Chennai–Bengaluru 2.45 2.45 290 290 809 989 Chennai–Meenambakkam–ATF 0.18 0.18 95 95 222 225 Digboi–Tinsukia 1 1 75 75 508 525 Devangonthi–Devanhalli 0.66 0.66 36 36 252 257 Nagapattinam–Narimana 0.37 * 7 * 329 * BPCL 8.8 10.84 1 648 1 697 8 205 9 169.96 Bina–Kolkata 2.8 2.8 259 259 2 183.63 2 347.5 Mumbai refinery–Santacruz Airport (ATF) — 1.44 — 15 — 676.09 Kochi refinery–Kochi Airport (ATF) — 0.6 — 34 — 121.32 HPCL 23.02 23.02 2 445.6 2 445.6 14 976.97 16 120.9 Mumbai–Pune–Solapur 4.3 4.3 508 508 4 055.69 3 943 Visakh–Vijayawada–Secunderabad 5.38 5.38 572 572 4 381.7 4 255 Mundra–Delhi 5 5 1 054 1 054 4 125.38 2 863 Ramanmandi–Bahadurgarh 4.71 4.71 243 243 1 477.83 3 878 Ramanmandi–Bathinda 1.13 1.13 30 30 485.38 756 Lube oil from Mumbai Refinery to 1 1 17.1 17.1 339 332 Mazagaon terminal Black oil pipeline from Mumbai Refinery 1.5 1.5 21.5 21.5 112 93.9 to Vashi terminal OIL 1.72 1.72 654.3 654.3 1 487 1 641.62 Numaligarh–Siliguri 1.72 1.72 654.3 654.3 1 487 1 641.62 PCCK 3.3 3.3 293 293 2 570 2 570 Kochi–Coimbatore–Karur 3.3 3.3 293 293 2 570 2 570 PHMB 2.14 2.14 364 364 2 816 3 073 Mangalore–Hassan–Bengaluru 2.14 2.14 364 364 2 816 3 073 Total onshore products pipeline 75.14 77.41 11 762.9 11 811.9 57 649.97 59 297.48 Total petroleum products pipeline 75.14 77.41 11 762.9 11 811.9 57 649.97 59 297.48 Grand total pipeline*** 79.67 81.94 14 074.9 14 123.9 61 278.97 62 927.48 *Nagapattinam–Narimanam pipeline has been removed from pipeline list from 2013/14 since it is a dock line and not a cross-country pipeline. **Though prime mover of 3 MTPA has been installed, delivery station at Tikrikalan is yet to be commissioned. Hence, it is not considered in capacity calculation. ***Includes LPG Pipeline MTPA – million tonnes per annum Source MoPNG (2014b)
TERI Energy and Environment Data Diary and Yearbook 2014/15 77 Energy supply some districts.1 The Dhande Committee was set up product-wise under-recoveries to oil companies, fiscal to review the challenges faced in its implementation. subsidy on public distribution system (PDS) kerosene The committee submitted its report to the government and LPG, and the burden sharing of under-recoveries, in May 2014. After review, the new government respectively. launched the PAHAL-Direct Benefits Transfer for LPG (DBTL) Consumers Scheme in 54 districts Natural gas across India in November 2014. It is to be expanded to the rest of India starting 1 January 2015. Under Domestic natural gas production this scheme, customers can link their LPG consumer The production of natural gas in India declined for numbers to either Aadhar or their bank accounts. the fourth year in a row. In 2013/14, the production In 2013/14, diesel was the other major petroleum was 35.4 BCM, which was a fall of 13% compared product that was being subsidized, although as of to 2012/13. As can be seen in Table 15, the public October 2014 (which falls in the fiscal year 2014/15), sector contribution, led by ONGC, has remained diesel prices have also been deregulated. As a fairly stable over the years. The steep rise in natural consequence, the prices of both the major transport gas production since 2009/10 and the unexpected fuels—diesel and petrol—are now deregulated. fall after 2010/11 were due to the production from As the process of diesel deregulation began in 2013 RIL-BP-Niko’s KG-DWN-98/3 (popularly known in the form of monthly increments in its price, the as the KG-D6) block. Tables 16 and 17 provide the under-recoveries of diesel fell to ` 62 837 crore in onshore and offshore production of natural gas in the 2013/14 from ` 92 000 crore in 2012/13. Owing to this, country, and Figure 3 shows the share of private and the total under-recoveries of all petroleum products public sectors in the total natural gas production since fell by 13% in this period. Tables 12, 13, and 14 present 1999/2000.
Table 12 Under-recoveries to oil companies (in ` crore) by product Sensitive petroleum products 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Petrol 2 723 2 027 7 332 5 181 5 151 2 227 — — — Diesel 12 647 18 776 35 166 52 286 9 279 34 706 81 192 92 061 62 837 Domestic LPG 10 246 10 701 15 523 17 600 14 257 21 772 299 970 39 558 46 457 PDS kerosene 14 384 17 883 19 102 28 225 17 364 19 484 273 520 29 410 30 574 Total 40 000 49 387 77 123 103 292 46 051 78 190 1 385 410 161 029 139 868 LPG – Liquefied Petroleum Gas; PDS – public distribution system Source PPAC (2014d)
Table 13 Fiscal subsidy on PDS kerosene and domestic LPG (in ` crore) Year 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 PDS kerosene 1 057 970 978 974 956 931 863 741 676 Domestic LPG 1 605 1 554 1 663 1 714 1 814 1 974 2 137 1 989 1 904 Total 2 662 2 524 2 641 2 688 2 770 2 904 3 000 2 730 2 580 LPG – Liquefied Petroleum Gas; PDS – public distribution system Source PPAC (2014d)
1 In November 2013, the Supreme Court of India, upholding its interim order in September 2013 (which was in response to a public interest litigation), ruled that Aadhar could not be made mandatory for receiving subsidies (IISD 2014).
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Table 14 Share of under-recoveries (in ` crore) Under-recovery and burden sharing (in ` crore) 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Total under-recovery 77 123 103 292 46 051 78 190 138 541 161 029 139 869 Burden sharing through oil bonds/cash subsidy# 35 290 71 292 26 000 41 000 83 500 100 000 70 772 Borne by oil marketing companies 16 125 0 5 621 6 893 41 1 029 2 076 Upstream companies* 25 708 32 000 14 430 30 297 55 000 60 000 67 021 *OIL, ONGC, and GAIL #Since 2009/10, cash subsidy has been provided by the government in place of oil bonds. Source MoPNG (2014b)
Table 15 Production of natural gas (by company, in BCM) Natural gas imports Year ONGC OIL Private/JV Total As the fourth largest LNG importer in 2013, India accounted for 6% of the global imports (EIA 2014). 2013/14 (P) 23.27 2.62 9.48 35.4 Despite this increasing global share, India’s imports 2012/13 23.55 2.64 14.49 40.68 of LNG fell for the second year in a row after 2011/12 23.31 2.63 21.61 47.55 2011/12 (Figure 4). However, the affordability of the 2010/11 23.09 2.35 26.77 52.21 consuming sectors, particularly power and fertilizers, plays an important role in determining the viability 2009/10 23.17 2.41 21.98 47.57 of imported natural gas (Jayaswal 2013). The price 2008/09 22.49 2.26 8.09 32.84 of domestically produced gas ranged between $4.2 2007/08 22.21 2.34 7.78 32.27 and $5.65. On the other hand, spot LNG prices ranged between $9 and $20.60, and long-term 2006/07 22.25 2.27 7.04 31.56 LNG prices between $6.24 and $13.28 (Mukherjee 2005/06 22.57 2.27 7.36 32.2 and Panandiker 2014). Reports state that potential 2004/05 22.99 2.01 6.78 31.77 domestic customers have been unwilling to sign long-term contracts due to high prices. In 2011/12 2003/04 23.58 1.88 6.49 31.96 and during five years prior to it, LNG imports had 2002/03 24.24 1.74 5.41 31.4 been rising at a CAGR of 7.1%. 2001/02 24.04 1.62 4.05 29.71 In 2012/13, India sourced its LNG imports from countries such as Algeria, Spain, Egypt, France, 2000/01 24.02 1.86 3.6 29.48 Yemen, Brunei, Qatar, and United Arab Emirates 1999/00 23.25 1.73 3.47 28.45 (Lok Sabha 2013a). In addition, the Gas Authority P – provisional of India Ltd (GAIL) has signed sale–purchase Source MoPNG (2014b)
Table 16 Production of onshore natural gas (by region, in BCM) Year Andhra Pradesh Arunachal Pradesh Assam Gujarat Rajasthan Tamil Nadu Tripura Total 2013/14 (P) 1.17 0.04 2.87 1.66 0.98 1.3 0.82 9.01 2012/13 1.25 0.04 2.91 2.03 0.68 1.21 0.65 8.77
2011/12 1.25 0.04 2.91 2.03 0.69 1.21 0.65 8.77 2010/11 1.38 0.04 2.68 2.26 0.043 1.12 0.61 8.53 2009/10 1.47 0.04 2.72 2.45 0.24 1.18 0.65 8.76 P – provisional Source MoPNG (2014b)
TERI Energy and Environment Data Diary and Yearbook 2014/15 79 Energy supply
agreements for LNG with the following (TERI 2014, Table 17 Production of offshore natural gas (by region, in BCM) Lok Sabha 2013b): Year ONGC Mumbai High Private/JV offshore Total • Sabine Pass Liquefaction LLC, USA (3.5 MTPA 2013/14 (P) 17.97 8.42 26.4 for 20 years) 2012/13 18.10 13.70 31.80 • Dominion Resources, USA (2.30 MTPA for 20 2011/12 17.56 20.91 38.47 years) • Gazprom Marketing and Trading, Singapore 2010/11 17.59 26.05 43.64 (2.5 MTPA for 20 years) 2009/10 17.46 21.35 38.81 • Gas Natural Fenosa, Spain (0.75 MTPA for 3 P – provisional years) Source MoPNG (2014b) • Gas de France, France (0.36 MTPA for 2 years) In March 2013, the Gujarat State Petroleum Corporation (GSPC) Ltd also signed a long- term agreement with the BG Group of the United Kingdom to initially supply 1.25 MTPA from 2015 with the potential to increase to 2.5 MTPA for 20 years (BG Group 2013). In 2009, the Petronet LNG Ltd also signed a 20-year contract to import 1.44 MTPA of LNG from Australia’s Gorgon project. The supply is expected to start by the end of 2015 (Petronet LNG 2014).
LNG terminals To meet the shortfall between the rising demand for natural gas and the domestic supply, India had Figure 3 Natural gas production in India by sector set up LNG import and re-gasification terminals. (in BCM) Developments on this front have been brisk, and P – provisional new terminals have been planned. Currently, there Source MoPNG (2014b) are four commissioned terminals, with the latest one, the Kochi Terminal by Petronet LNG Ltd (PLL),
Figure 4 Natural gas imports (in MT) Source PPAC (2014e)
80 TERI Energy and Environment Data Diary and Yearbook 2014/15 Petroleum and natural gas commissioned in August 2013. The capacity of the power plants, as their requirement is over and above existing Dahej terminal, operated by PLL, is being 18 MSCMD (MoPNG 2008). These guidelines stretched to 11 MPTA and will further be increased were later modified to include non-priority sectors, to 15 MTPA by 2015/16. The completed Phase 1 of including steel plants, refineries, and petrochemical the Hazira terminal by the Hazira LNG Pvt. Ltd (a plants. After a drop in the production from the KG- joint venture between Royal Dutch Shell and Total D6 block, the government reduced allocation of gas SA, France) has a capacity of 3.6 MPTA, which will to non-core sectors (TERI 2014a). Table 21 gives the be expanded to 5 MTPA. The Dabhol LNG terminal industry-wise off-take of natural gas since 2007/08. operated by the Ratnagiri Gas and Power Pvt. Ltd (a consortium between GAIL and ONGC) will operate at Natural gas pricing full capacity once breakwater facilities are established One of the key characteristics of the natural gas sector by 2016/17. The Kochi terminal is also performing in India is the presence of multiple natural gas prices. at a low capacity due to the limited availability of A multiplicity of prices exist even after a new domestic pipeline network for gas evacuation. Completion gas pricing policy was approved on 18 October 2014 of this network will enhance the utilization of the by the Cabinet Committee on Economic Affairs terminal (Petronet LNG 2014). Table 18 shows the (CCEA 2014). However, the new gas price formula existing and planned LNG terminals on the east and does provide greater clarity than the earlier pricing west coasts of India. With the aim of meeting the rising structure. The new gas price formula is as follows: demand for natural gas, the Twelfth Five-year Plan P = (VHH*PHH + VAC*PAC + VNBP*PNBP envisages to increase India’s re-gasification capacity + VR*PR)/(VHH + VAC + VNBP + VR) to nearly 55 MTPA (see Map 2). Here, a. VHH is the total annual volume of natural gas Natural gas pipelines consumed in the USA and Mexico. The country has more than 15 000 km of natural gas b. VAC is the total annual volume of natural gas pipelines at present. As announced in the 2014 Union consumed in Canada. Budget, the government intends to create a national c. VNBP is the total annual volume of natural gas grid by adding 15 000 km of pipelines during gas consumed in EU and Former Soviet Union the Twelfth Five-year Plan period. The budget also (FSU), excluding Russia. envisages the scaling-up of piped natural gas (PNG) d. VR is the total annual volume of natural gas use, which requires reliable city gas distribution consumed in Russia. (CGD) networks, on a mission mode. However, due e. PHH and PNBP are the annual average of to a shortage in supply, most of the pipelines have daily prices at Henry Hub (HH) and National been underutilized (PPAC 2014f). Tables 19 and 20 Balancing Point (NBP) less the transportation provide details of the existing and under-construction and treatment charges. pipelines, respectively. f. PAC and PR are the annual average of monthly prices at Alberta Hub and Russia, respectively, Natural gas consumption less the transportation and treatment charges. This new pricing formula is a modification of the The Gas Utilization Policy, introduced in 2008, Rangarajan gas price formula. The new prices will governs the supply of natural gas in India. The policy be determined on a half-yearly basis. The data used was put into effect to regulate the supply of natural would be of four quarters, with a lag of one quarter. gas from RIL-BP-Niko’s KG-D6 fields. According The prices announced would be based on gross to this policy, the order of priority of supply would calorific value (GCV) rather than on net calorific value be as follows: first, gas-based urea plants; second, (NCV). The new pricing formula came into effect on gas-based LPG plants, with an upper limit of 1 November 2014, after the Election Commission of 3 MSCMD; third, gas-based power plants, with an India deferred the implementation of the Rangarajan upper limit of 18 MSCMD; fourth, CGD projects, formula due to the Lok Sabha elections. The new with an upper limit of 5 MSCMD; and finally, price according to this formula is $5.05/MMBTU on any additional gas would be supplied to gas-based a GCV basis (PPAC 2014g).
TERI Energy and Environment Data Diary and Yearbook 2014/15 81 Energy supply
Map 2 Natural gas pipelines and LNG terminals in India Sources TERI (2014a); The Hindu (2013a, 2013b); Business Standard (2013a, 2013b); Lok Sabha (2013a, 2013c); MoPNG (2014b); PPAC (2014f)
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Table 18 Existing and planned LNG terminals in India Project and developer Location (state) Capacity (MTPA) Suppliers Status Dahej LNG terminal Dahej (Gujarat) 10 (operating at 11 RasGas (Qatar-based LNG supply Commissioned in (Petronet LNG Ltd) MTPA; to be expanded company) and spot cargoes February 2004 and to 15 MTPA by 2016) commercial sales began in April 2004 Hazira LNG (Shell and Hazira (Gujarat) 3.6 (phase 1) (to Spot cargoes Commissioned in Total) be expanded to 5 April 2005 MTPA) Dabhol terminal Dabhol (Maharashtra) 5.0 (limited usage Spot cargoes (long-term Commissioned in (Ratnagiri Gas and till breakwater agreement for supply of LNG is 2012 Power Pvt. Ltd) facilities added by yet to be finalized) 2016/17) Kochi LNG (Petronet Kochi (Kerala) 5.0 LNG sale and purchase Commissioned in LNG Ltd) agreement with Exxon Mobil 2013 Corporation for supply of approximately 1.5 MTPA of LNG from Gorgon LNG project, Australia Ennore LNG Ennore (Tamil Nadu) 5.0 Yet to be finalized Scheduled to be (IOCL and CPCL) commissioned in 2016/17 Mundra LNG terminal Mundra (Gujarat) 5.0 Yet to be finalized Scheduled to be (GSPC and Adani) commissioned by December 2016 Mangalore LNG Mangalore 2.0–3.0 Yet to be finalized Planned (ONGC and MRPL) (Karnataka) Kakinada FSRU Kakinada (Andhra Pradesh) 3.5–5.0 Yet to be finalized Planned terminal (APGIC and (expandable up to GAIL) 10 MT)
Gangavaram Gangavaram 5.0 Yet to be finalized Scheduled to be (Petronet LNG Ltd) (Andhra Pradesh) commissioned by 2016 Digha FSRU Terminal Digha region (West Bengal) 4.0 Yet to be finalized Scheduled to be (HEECPL) commissioned by 2017 Paradip FSRU Paradip (Odisha) 4.0 Yet to be finalized Scheduled to be Terminal (GAIL) commissioned by 2017 Pipavav port FSRU Pipavav (Gujarat) 2.5–5.0 Yet to be finalized Planned Terminal (SEL) APGIC – Andhra Pradesh Gas Infrastructure Corporation; CPCL – Chennai Petroleum Corporation Ltd; FSRU – floating storage re-gasification unit; GAIL – Gas Authority of India Ltd; GSPC – Gujarat State Petroleum Corporation; HEECPL – H-Energy East Coast Private Ltd; IOCL – Indian Oil Corporation Ltd; LNG – liquefied natural gas; MRPL – Mangalore Refinery and Petrochemicals Ltd; MT – million tonnes; MTPA – million tonnes per annum; ONGC – Oil and Natural Gas Corporation; SEL – Swan Energy Ltd Source TERI (2014a); The Hindu (2013a, 2013b); Business Standard (2013a, 2013b); Lok Sabha (2013a, 2013c)
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Table 19 Details of existing natural gas pipelines Type of pipeline/owner/name of Capacity (MSCMD) Length (km) (as on 1 April) Throughput (MSCMD) (as on 1 April) (P) pipeline 2013 2014 2013 2014 2012/13 2013/14 Gas pipeline (onshore) IOCL 9.5 9.5 134 134 960 1 168 Dadri-Panipat RLNG Pipeline 9.5 9.5 134 134 960 1 168 ONGC 2.65 2.65 52.7 52.7 0.09 0.59 20¢¢ Agartala Dome–OTPC Palatana 2.65 2.65 52.7 52.7 0.09 0.59
GAIL 210.34 206.04 10 702 10 909 104.9 96.22 HVJ–GREP–DVPL# 57.3 53 4 435 4 586 47.45 42.92 DVPL–GREP upgradation (DVPL-II and 54 54 1 112 1 112 12.63 15.33 VDPL) Chhainsa–Jhajjar–Hissar P/L 5 5 262 262 0.72 0.68 Dadri–Bawana–Nangal 11 11 788 803 1.43 2.4 Dahej–Panvel–Dabhol 19.9 19.9 873 873 13.64 8.92 KKBMPL Phase 1 6 6 0 41 0 0.31 Dabhol–Bengaluru 16 16 1 004 1 004 0.06 0.97 South Gujarat Regional 15.42 15.42 587 587 7.2 4.98 North Gujarat Regional 2.91 2.91 144 144 0.41 0.37 Rajasthan Regional (Jaisalmer) 2.35 2.35 154 154 0.75 1.09 Cauvery Basin 8.66 8.66 268 268 3.2 3.57 KG Basin 16 16 877 877 8.64 5.99 Assam (Lakwa) 2.5 2.5 8 8 0.61 0.57 Tripura 2.26 2.26 61 61 1.45 1.48 Mumbai Regional 7.04 7.04 129 129 8.86 9.72 GSPL 50 50 2 163 2 174 NA NA GSPL–Gujarat Gas Grid 50 50 2 163 2 174 NA NA Assam Gas Company NA 6 NA 1 000 NA 4.5 Duliajan to Numaligarh NA 6 NA 1 000 NA 4.5 RIL 85 85 1 375 1 375 33.41 20.2 East–West Pipeline** 85 85 1 375 1 375 33.41 20.2 Total onshore pipeline 357.48 359.18 14 426.7 15 644.7 1 098.4 1 289.51 Gas pipeline (offshore) ONGC 105.76 105.76 987 987 46.54 45.68 28¢¢ MUT Gas Line 12.25 12.25 204 204 9.32 9.95 26¢¢ BUT Gas Line* 12.49 12.49 203 203 0.24 0 26¢¢ HUT Gas line 16 16 81 81 1.78 2.09 36¢¢ BPA–Hazira 22 22 231 231 14.37 13.37 Contd...
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Table 19 DetailsContd.... of existing natural gas pipelines Type of pipeline/owner/name of Capacity (MSCMD) Length (km) (as on 1 April) Throughput (MSCMD) (as on 1 April) (P) pipeline 2013 2014 2013 2014 2012/13 2013/14
46¢¢ BPB–Hazira 37.02 37.02 244 244 16.98 16.33 Trombay Gas Trunk line 6 6 24 24 3.85 3.94 Total offshore pipeline 105.76 105.76 987 987 46.54 45.68 Total pipeline 463.24 464.94 15 413.7 16 631.7 1 144.94 1 335.19 DVPL – Dahej–Vijaipur pipeline; GAIL – Gas Authority of India Ltd; GREP – Gas Rehabilitation and Expansion Project; HVJ – Hazira–Vijaipur–Jagdishpur; IOCL – Indian Oil Corporation Ltd; MSCMD – million standard cubic metres per day; KKBMPL – Kochi–Kanjirkkod–Bengaluru–Mangalore; ONGC – Oil and Natural Gas Corporation; P – provisional; RIL – Reliance Industries Ltd; RLNG – re-gasified liquefied natural gas *RIL’s Gas Pipeline (onshore) comprises 1375 km trunk line + approximately 105 km spur line **Derated to maximum allowable operating pressure to 60 kg/cm2 as per fit for purpose certification # HVJ line capacity has been changed to 53.0 MSCMD from 57.3 MSCMD after visit/calculation by PNGRB. Note Excludes 782 km and 529 km onshore and offshore pipeline, respectively, reported by DGH of Pvt./JVs and 77 km onshore pipeline reported by Essar Oil Ltd. Source MoPNG (2014b)
fixed period of time (although it will apply here after Table 20 Gas pipelines under construction the end of such a contractual period), (c) blocks Network/region Entity Length (in km) Design capacity where the PSC provides a specific formula for natural (MSCMD) gas price indexation or fixation, and (d) in pre-NELP Kochi–Koottanad– blocks where no government approval is needed GAIL 1 104 16 Bengaluru–Mangalore under the PSC. Dabhol–Bengaluru Further, due to ongoing arbitration on the GAIL 1 414 16 (DBPL) KG-DWN-98-3 block (popularly known as KG-D6), the operator RIL-BP-NIKO would continue to pay Surat–Paradip GAIL 2 112 75 the earlier price of $4.2/MMBTU, and the balance Jagdishpur–Haldia* GAIL 1 860 32 between the new price and the older price would be credited to a gas pool account maintained by GAIL. Mallavaram– GSPL 2 042 76.25 Additionally, there would be a premium on the price Bhilwada* GITL paid for the gas extracted from deep sea blocks Mehsana–Bathinda* GSPL 2 052 77.11 and from high pressure, high temperature areas GIGL (CCEA 2014). Bathinda–Srinagar* GSPL 725 42 GIGL Unconventional fossil fuels Kakinada–Srikakulam APGDC 391 90 Coal bed methane Total 11 700 425 *Competitive bidding Coal bed methane is natural gas extracted from Source PPAC (2014f) coal beds instead of conventional reservoirs. Of the 35 407 MMSCM of natural gas produced in India This new price would apply to all gas produced in 2013/14, 166 MMSCM was produced in West from “nominated fields” given to ONGC and OIL, Bengal’s CBM blocks, namely, Raniganj South all New Exploration Licensing Policy (NELP) blocks, and East, Sohagpur East and West, and Jharia. The and pre-NELP blocks where the Production Sharing companies operating these blocks are GEECL (Great Contract (PSC) provides for government approval Eastern Energy Corporation Ltd), Essar, ONGC, and of gas prices. It will also apply to coal bed methane RIL. India’s CBM production constituted 0.47% of (CBM) blocks. This new price would not apply to the total natural gas production. The two Raniganj (a) small and isolated nomination blocks, (b) blocks blocks being operated by GEECL and Essar are the where the prices have been fixed contractually for a most productive of all the CBM blocks.
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Table 21 Industry-wise off-take of natural gas (figures in million m3) Industry 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14* Energy purposes Power generation 12 037 12 603 21 365 25 787 20 765 14 478 10 534 Industrial fuel 3 323 5 912 2 322 903 1 694 1 059 1 077 Tea plantation 160 154 167 193 175 182 196 Domestic fuel/transport# 38 102 246 2 524 3 192 2 752 2 921 Captive use/LPG shrinkage 1 804 1 885 5 433 6 781 6 366 6 194 4 742 Others** 1 324 1 535 1 838 765 1 851 683 713 Total 18 686 22 191 31 371 36 953 34 044 25 348 20 183 Non-energy purposes Fertilizer industry 9 823 9 082 13 168 11 464 11 330 11 496 11 060 Petrochemicals 1 432 1 105 1 264 1 309 1 409 1 074 1 395 Others*** 638 611 703 1 529 226 1 303 1 326 Total 11 893 10 798 15 135 14 302 12 964 13 874 13 782 Grand total 30 579 32 989 46 506 51 255 47 008 39 222 33 965 #Includes total off-take by CGD entities for domestic (PNG), transport (compressed natural gas; industrial and commercial sector) *Provisional **Includes sponge iron use ***Includes refineries, heavy water plants Note Excludes total off-take of imported LNG Source MoPNG (2014b)
the total CBM production to be 1256 MMSCM in 2016/17. However, CBM production in the past has not met its projected plans.
Shale gas Shale gas is a natural gas extracted from sedimentary rock formations (see Figure 5). Currently, there is no production of shale gas in India. However, ONGC and OIL are operating pilot wells in Damodar Valley in Gujarat. The status of these test wells has not been made public. There are varying estimates of shale gas reserves Figure 5 Geology of natural gas resources Source EIA (2011) in India. The EIA (USA) has reported 1278 tcf of gas-in-place reserves, of which 96 tcf is recoverable. The United States Geological Survey, on the other hand, estimated 6.1 tcf to be technically recoverable. For the exploration and production of CBM, 33 However, they considered only three basins, compared blocks have so far been awarded to public and private to four by EIA (DGH 2013). companies in Jharkhand, West Bengal, Chhattisgarh, The existing shale gas policy came into effect in Madhya Pradesh, Maharashtra, Rajasthan, Gujarat, October 2013. It gives permission to only state-run Andhra Pradesh, Tamil Nadu, Odisha, and Assam. ONGC and OIL to begin shale gas and oil assessment The Planning Commission (2011) has projected activities.
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Ethanol Natural gas hydrates The Ethanol Blended Petrol (EBP) Programme In 1997, the Ministry of Petroleum and Natural mandates up to 5% blending of ethanol with petrol. Gas initiated the National Gas Hydrate Programme This target was to be met by October 2013. However, (NGHP) in India. The NGHP is a consortium of only 45% of the total requirement of ethanol was ONGC, OIL, National Institute of Oceanography, met in 2013. To meet the EBP targets and promote National Geophysical Research Institute, and National ethanol production, the Government of India began Institute of Ocean Technology. Surveys conducted by in July 2014 to provide soft loans of up to 40% of the Directorate General of Hydrocarbons (DGH) have the project cost. In December 2014, the government revealed the presence of gas hydrates in the Krishna– approved a new mechanism for procuring ethanol Godavari basin, Mahanadi basin of the Bay of Bengal, (PIB 2014a). The delivered price of ethanol has been and Andaman Islands. India’s total prognosticated fixed in the range of` 48.5–49.5 per litre. gas hydrate resources are estimated to be 1894 Further, OMCs will now incorporate a “supply or trillion m3. Although the NGHP has set itself a deadline pay” clause backed by bank guarantees from ethanol of mid-2015 to begin commercial production, the suppliers. OMCs have been facing a few bottlenecks DGH refers to it as a “far-fetched thought (sic)”.2 in procuring ethanol. First, state excise departments The absence of proven technology anywhere in the currently regulate the transportation of ethanol. world to exploit gas hydrates has been cited as a They adopt a time-consuming and complicated key challenge. In September 2014, a memorandum procedure. Second, until the new price notification, of understanding was signed with the United States the uncertainty created by the prevalent pricing Department of Energy (USDOE) to facilitate mechanism was also an impediment (PIB 2014a). its participation in India’s NGHP (PIB 2014b). Finally, ethanol is a by-product of molasses. As Currently, only research and development work is on sugarcane production is cyclical in nature, the supply (BPCL 2014). of ethanol varies throughout the year.
2 Details available at
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Associated gas flaring
Flaring is the intentional burning of “associated natural gas” released inadvertently during the extraction of crude oil. A significant amount of natural gas is lost every year due to the lack of adequate infrastructure to store, transport, and use associated gas. Elvidge, Baugh, Tuttle, et al. (2007) reveal that approximately 150 BCM of gas is flared every year globally,
which forms approximately 5% of the global natural gas production. Flaring leads to approximately 400 MT equivalent of CO2 emissions every year, which is approximately 2% of global CO2 emissions from energy sources (GE Energy 2010). In India, around 0.8–1 BCM of gas was flared every year between 2005/06 and 2012/13 (MoPNG 2014b). This constituted around 1.9%–3.4% of the total natural gas produced in India during this period. However, gas flaring is not consistently low in India. Assam and Arunachal Pradesh flared each year around 6.6%–9% of the total gas produced during 2005–13. Although these two states produced 7.2% of the total natural gas extracted in India during 2012/13, they were responsible for 24.5% of the total gas flared in India. To decrease flaring, there have been global and local initiatives. For instance, the ONGC in India reduced flaring by 22% in 2012/13 compared to 2011/12 by installing and upgrading facilities and technology. Such measures have resulted in the utilization of 0.5 BCM of gas in 2012/13 (compared to 2001/02 base year), which would have otherwise been flared (ONGC 2013). Other upstream companies, such as OIL, Essar, and RIL, have also taken several steps to limit flaring. International efforts have been led by the World Bank’s Global Gas Flaring Reduction Partnership. As per the World Bank recommendations, flaring should be explicitly addressed in the licenses, fiscal terms and market-based incentives should encourage the commercialization of associated gas, and the regulator should constantly monitor flaring activities. Several countries have taken steps in this direction. Norway and Nigeria, for instance, have imposed a tax regime, leading to reductions in flaring. The United States achieved reductions by imposing royalty payments for flared gas that the regulator believed could have been utilized (World Bank 2004).
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References Jayaswal, R. 2013. Gail India struggles to find buyers for imported LNG. Economic Times, 13 May 2013. Details available at BG Group. 2013. BG Group completes agreement on long-term LNG
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PPAC (Petroleum Planning and Analysis Cell). 2014c. Import/Export of The Hindu. 2013a. LNG terminal to be commissioned by 2016: Saurabh Crude oil and Petroleum Products. New Delhi: PPAC Patel. The Hindu, 13 July 2014. Details available at
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