RIL-BP and ONGC to push India's gas output to 52% by 20242 min read . Updated: 22 Apr 2021, 10:00 PM IST
- The output is projected to rise in the current fiscal to 93 mmscmd, 107 mmscmd in the following year and 122 mmscmd in 2023-24
As Reliance Industries Ltd-BP and state-owned Oil and Natural Gas Corporation (ONGC) raise output from the KG basin fields, India's natural gas production is projected to jump by 52% to 122 million standard cubic meters (mmscmd) per day by 2024.
Natural gas production in 2019-20 was 85 mmscmd, which is estimated to have fallen to 80 mmscmd in the following year, HDFC Securities said in a report.
The output is projected to rise in the current fiscal that started on April 1 to 93 mmscmd, 107 mmscmd in the following year and 122 mmscmd in 2023-24, according to the brokerage.
HDFC Securities said the KGD6 consortium has sought bids from customers as it intends to sell an additional 5.5 mmscmd of gas from the Krishna Godavari (KG) Basin block, off the eastern coast of India.
The additional gas will be available for sale at the delivery point at Gadimoga, near Kakinada, tentatively from the last week of April or early May 2021.
ONGC has also floated the tender for prospective buyers to bid for gas supplies from its KG-DWN-98/2 field in the KG Basin offshore. The company will supply 2 mmscmd of gas from the field to the Odalarevu onshore terminal in Andhra Pradesh, which should commence from June 2021.
The RIL-BP consortium has commenced gas production from R-cluster, an ultra-deepwater gas field, in December 2020 whereas production from the Satellites Cluster and MJ field is expected to start by mid-2021 and 2022, respectively. Peak gas production from the three fields is expected to be 30 mmscmd by 2023.
ONGC on the other hand commenced gas production from KG-DWN-98/2 in March 2020. It had in recent years seen gas output stagnate. While it is likely to see production rise to 67 mmscmd in 2021-22 from 62 mmscmd in the previous year, it would further rise to 69 mmscmd in FY23 and 75 mmscmd in FY24.
On the demand front, India's domestic gas demand is projected to climb from 153.8 mmscmd in FY21 (April 2020 to March 2021) to 215.5 mmscmd in 2024-25.
"The tenders from the KG-D6 consortium and ONGC to sell gas from KG Basin underscores our thesis of rising domestic gas production. These and earlier tenders indicate a total increase of about 20 mmscmd (23% of FY20 domestic supply) in the supply of gas from domestic sources over December 2020 to July 2021," the borkerage said.
The KG-D6 consortium has already signed the Gas Sales and Purchase Agreement (GSPA) with buyers to sell 4.8 mmscmd and 7.5 mmscmd of gas from KGD6 Basin in November-19 and February-21, respectively.
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