India was able to import only a third of the gas it wanted to ship into the country in 2006-07, owing to uncertainties in the global gas trade and inadequate infrastructure in the country to handle gas imports, resulting in a shortage of the fuel that affected several companies, including power utilities and fertilizer manufacturers.
The country had originally planned to import 15 million tonnes per annum (mtpa) of gas, but ended up importing a third of that amount, according to a senior official at the ministry of petroleum and natural gas, who did not wish to be identified.
India has only two LNG (liquefied natural gas) regasification terminals with a combined capacity of 7.5mtpa.
Gas is shipped in liquid form and regasified when the ship berths.
“In the 10th-Plan period (2002-07), four LNG terminals were planned, of which only two terminals with a combined capacity of 7.5mtpa were commissioned. This has hampered our import capacity,” said the official at the ministry.
In 2006-07, total demand for gas in the country was 150 million standard cubic metre per day (mscmd)—4mscmd make an mtpa—and total supply, 90mscmd.
The demand from the power sector was around 68mscmd and that from the fertilizer sector 28.5mscmd. The country was able to supply 70mscmd from internal sources.
“Of the 50mscmd that was targeted as LNG imports through LNG carriers, only around 20mscmd was received,” the official said.
And the government’s target of sourcing 10mscmd of gas through transnational pipelines also failed as all pipelines are still only on paper.
Shell’s Hazira terminal (2.5mtpa) and Petronet’s Dahej terminal (5mtpa) are operational, but the Kochi terminal (2.5mtpa) and the Dabhol one (5mtpa) have not been commissioned.
Uncertainties still surround the Dabhol terminal with funding issues still to be worked out. Terminals at Ennore (2.5mtpa) and Mangalore (5mtpa) are also in the pipeline.
Transnational gas pipelines such as the Iran-Pakistan-India one, the Myanmar-India one and the Turkmenistan-Afghanistan-Pakistan-India one have been delayed by political and economic issues.
The construction of “domestic regasification infrastructure slowed partly because of finds in the Krishna Godavari basin and the Mahanadi basin, and because of global tightening of LNG supplies”, said Ajay Arora, a partner at accounting firm Ernst & Young.
The Union ministry of petroleum and natural gas estimates that India will need around 180mscmd of gas in 2007-08.
The ministry also expects supply to be around 81mscmd, and that the shortage will persist till 2012.