India Recorded Sharp Decline in Gas Output Last Year

India’s natural gas output and consumption declined the most last year, Press Trust of India reports citing BP Statistical Review of World Energy 2014.

According to BP, gas production in the country fell a massive 16.3 per cent to 33.7 billion cubic meters from 40.3 bcm in the previous year, says Press Trust.

Consumption fell by 12.2 per cent to 51.4 bcm in 2013 from 58.8 bcm in the previous year. On both counts, India “recorded the largest volumetric decline in the world,” the Review said.

Flagship KG Basin offshore India’s east coast has seen a consistent decline over past few years. Two big players, ONGC and Reliance Industries (RIL) have outlined plans to increase natural gas output from KG Basin.

Earlier this year, state owned ONGC said it plans to invest nearly $9 billion to boost oil and gas output in KG Basin by 2017-18. Last year, RIL and partner BP said they plan to pump in over $5 billion in various projects to revive gas output from its flagship KG-D6 fields.

Also, Indian government has been working on introducing a revised price regime for domestically produced natural gas in order to boost output. The previous government had given a go ahead to pricing formula suggested by a panel headed by C Rangarajan. The new price regime was supposed to come into effect from April 1 but was deferred because of national elections. Price of gas, according to this formula, comes to around $8.3 per million British thermal unit, almost double the current price of $4.2.

However, according to some media reports the new government may constitute an expert panel to recommend a less-complex formula for pricing of domestically produced natural gas.