India - the natural gas cliff

India's natural gas output may drop by 35% next FY

the Economic Times,

25 March, 2012

HYDERABAD: In a worrying development for gas-based power plants, India's natural gas production is likely to fall by 35 per cent to 27.64 million metric standard cubic meters per day (mmscd) in the next fiscal and may drop further by another 12 per cent to 24.22 mmscmd in 2013-14. 

This has been revealed by the Ministry of Petroleum and Natural Gas (MoP&NG). 

The power producers' woes may worsen across the country as some of the plants are ready but sitting idle due to non-availability of gas. 

A recent communication by the Central Electricity Authority (CEA) to States suggested that developers should not take up new power projects until 2015-16. 

A Power Ministry official, who confirmed the letter to States, said the embargo may not have any impact on the 12th Five-Year Plan (2012-17) capacity additions as it was only little above 1000 mw that was targeted for gas-based power. 

"As per the information made available by the Ministry of Petroleum and Natural Gas regarding NELP gas, the production is likely to go down by 15.03 mmscmd in 2012-13 and additional 3.42 mmscmd in 2013-14 against the availability of 42.67 mmscmd in 2011-12. The Ministry has not given any projections for 2014-15 and 2015-16. 

"It is evident from the above that no additional domestic gas is likely to be available until 2015-16. Hence developers are advised not to plan projects based on domestic gas till 2015-16. When MoP&NG indicates availability of gas, developers will be intimated," the CEA letter dated March 19 said. 

A senior official of GVK Power earlier said the Government had asked them to put off their expansion plans until a clear picture emerges on gas availability.