Lok Sabha Question No. 183 (UNSTARRED), answered on 2015-11-30
Subject: Demand and Supply of Natural Gas
Ministry: PETROLEUM AND NATURAL GAS
Asked by: DILIP PATEL, NEELAM SONKER, K. ASHOK KUMAR, KRUPAL BALAJI TUMANE, ARVIND GANPAT SAWANT, VINOD CHAVDA, PRATHAP SIMHA, CHANDRAKANT RAGHUNATH PATIL, S.P. MUDDAHANUMEGOWDA, SHIVKUMAR CHANABASAPPA UDASI, GOPALAKRISHNAN CHINNARAJ, DIPSINH SHANKARSINH RATHOD

## LOK SABHA

## UNSTARRED QUESTION NO. 183

## TO BE ANSWERED ON 30.11.2015

## DEMAND AND SUPPLY OF NATURAL GAS

## 183.      SHRI DILIP PATEL:

SHRIMATI NEELAM SONKER: SHRI K. ASHOK KUMAR: SHRI KRUPAL BALAJI TUMANE: SHRI ARVIND SAWANT: SHRI VINOD LAKHAMASHI CHAVDA: SHRI PRATHAP SIMHA: SHRI C.R. PATIL: SHRI S.P. MUDDAHANUME GOWDA: SHRI SHIVKUMAR UDASI: DR. C. GOPALAKRISHNAN: SHRI D.S. RATHOD:

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

## isVªksfy;evkSjizkd`frdxSlea=h

- (a) the details of demand and supply of natural gas in the country along with the quantum of gas/LNG imported to meet the shortfall/projected demand during the last three years and the current year along with the steps taken by the Government to uniform the price of domestically produced natural gas/regasification and imported LNG and supply to fertilizers/power/Small and Medium Enterprises (SMEs), country/sector-wise;
- (b) whether the Government has fixed priority in allocation of gas including gas produced from D6 and prices  of  gas  to  various  sectors  of  economy  particularly  power/fertilizers  and  SMEs  as  per  their capacity/requirement;
- (c)  if  so,  the  details  of  the  gas  produced  by  various  companies  and  allocated  to  various  priority/nonpriority  sectors  along  with  the  steps  taken  by  the  Government  for  uniform  prices  across  the  country, sector/oil field/State/UT-wise;
- (d)  whether  the  gas  based  SMEs/power/fertilizers  and  other  industries  are  badly  affected  and  on  the verge of closure due to short supply/shortfall  of gas and if so, the details thereof along with request received  from  various  States  for  supply  of  natural  gas  and  follow-up  action  taken  in  this  regard, State/UT-wise;
- (e)  whether  Gas  Authority  of  India  Limited  has  been  arbitrarily  cutting  gas  supplied  to  fertilizer companies affecting urea production in the country and if so, the details thereof and steps being taken to normalise the gas supply; and
- (f)  the  details  of  LNG  terminals  set  up/proposed to be  set  up  in  the  country  to  balance  the  projected demand and supply position in the country along with infrastructure of gas pipeline and other related facilities, State/UT and company-wise including Karnataka?

## ANSWER

## पेट्रोलियम औरप्राक ृ लिकगैसमंत्रािय मेंराज् य मंत्ररी(स् िंत्र प्राार सश्ररी(धमेन्द रप्रधा

## MINISTER OF STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a): The details of demand and supply of natural gas to various sectors during 2014-15 are as under:

| Sector                                           |   Projected Demand during 2014-15 as per working Group Report- 12 th Five Year Plan (In MMSCMD) |   Supply (Domestic and R- LNG) during 2014-15 (In MMSCMD) |
|--------------------------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------|
| Power                                            |                                                                                             171 |                                                     28.04 |
| Fertilizer                                       |                                                                                             113 |                                                     41.91 |
| City Gas                                         |                                                                                              24 |                                                     16.3  |
| Petrochemicals/ Refineries/ Internal Consumption |                                                                                              67 |                                                     19.62 |
| Steel                                            |                                                                                               8 |                                                      2.2  |
| Others                                           |                                                                                              22 |                                                      8.71 |

However, the actual demand is price sensitive and total utilization during 2014-15 was 116.78 (73.93 MMSCMD domestic and 42.85 MMSCMD R-LNG).

Due to less demand of imported LNG, out of 62.10 MMSCMD of total regasification capacity, 19.25 MMSCMD remained unutilized. In power and fertilizer sector, installed capacity is much less than the demand projected by working group.

The quantity of R-LNG imported during last three year and current year is as under:

| Year                          |   2012-13 |   2013-14 |   2014-15 |   2015-16 (April to Aug - 2015) |
|-------------------------------|-----------|-----------|-----------|---------------------------------|
| Quantity Imported Million Ton |    13.135 |     13.02 |    13.289 |                             5.8 |

The Cabinet Committee on Economic Affairs (CCEA), in its meeting dated 25.03.2015 approved the policy  to  revive  and  improve  utilization  of  the  stranded  gas  based  power  generation  capacity  in  the country for the year 2015-16 & 2016-17 and as per the approval of the CCEA Ministry of Power has notified the scheme for utilization of Gas based power generation capacity on 27.03.2015. The scheme envisages supply of imported spot R-LNG at uniform base price to stranded gas based plants as well as the plants receiving domestic gas, up-to the target PLF selected through a reverse e-bidding process.

Further, the Cabinet Committee on Economic Affairs (CCEA) in its meeting dated 31.03.2015 approved the scheme for pooling of gas in Fertilizer (Urea) sector. In compliance with the approval of CCEA, Ministry  of  Petroleum  and  Natural  Gas  on  20.05.2015  has  notified  guidelines  for  pooling  of  gas  in fertilizer (Urea) sector. As per the guidelines domestic gas is being pooled with Re-gasified Liquefied Natural  Gas  (R-LNG)  to  provide  natural  gas  at  uniform  delivered  price  to  all  Natural  Gas  Grid connected Urea manufacturing plants for the purpose of manufacturing of Urea.

(b): Yes, Government has fixed the sectoral priority in allocation of gas including gas produced from KG D6. The Government had issued New Domestic Natural Gas Pricing Guidelines on 25/10/2014. As per  the  New  Domestic  Natural  Gas  Pricing  Guidelines,  2014,  the  gas  price  determined  under  these guidelines  would  be  applicable  to  all  gas  produced  from  nominated  fields  given  to  ONGC  and  OIL India,  the  New  Exploration  and  Licensing  Policy  (NELP)  blocks,  such  Pre-NELP  blocks,  where  the Production  Sharing  Contract  (PSC)  provides  for  government  approval  of  gas  prices  and  Coal  Bed Methane (CBM) blocks except gas produced from Small and isolated fields in nominated blocks, blocks where prices have been fixed contractually for a certain period of time, gas produced from blocks where the  PSC  concerned  provides  a  specific  formula  for  natural  gas  price  indexation/fixation  and  gas produced  from  such  Pre-NELP  blocks  where  the  PSCs  do  not  provide  for  Government  approval  of formula/ basis for gas prices. The gas prices determined under the above guidelines is applicable to all sector uniformly.

(c): As per data available in the Ministry, company-wise gas produced during the period of April to July2015 is as under:

| Company Name   |   Gas produced inMMSCM |
|----------------|------------------------|
| ONGC           |                7169.3  |
| OIL            |                 874.23 |
| PVT JV         |                2822    |
| Total          |               10865.5  |

The sector wise details of domestic gas allocation are as under.

(MMSCMD)

|                 |   Firm | Fall Back   |   Total |
|-----------------|--------|-------------|---------|
| Fertilizers     |  55.83 | 3.09        |   58.92 |
| Power           |  90.6  | 18.09       |  108.69 |
| LPG             |  10.54 | 0.04        |   10.58 |
| CGD             |  12.31 |             |   12.31 |
| Small Consumers |   0.5  | 2.42        |    2.92 |
| Petrochemicals  |  11.92 | 0.81        |   12.73 |
| Refineries      |   8.98 | 6.00        |   14.98 |
| Court Mandated  |   1.1  | 0.00        |    1.1  |

| Internal Consumption   |   1.55 |   0.00 |   1.55 |
|------------------------|--------|--------|--------|
| Others                 |   2.21 |  10.96 |  13.17 |
| Steel                  |   8.4  |   1.55 |   9.95 |
| Total                  | 201.06 |  45.29 | 246.89 |

- (d): After implementation of Pooling in Fertilizer (Urea) Sector, fertilizer plants are getting supplies of natural gas as per their requirement. Similarly after implementation of the scheme for utilization of Gas based power generation capacity, power plants successful in reverse e-bidding process, which also includes stranded power plants get supply of R-LNG up to target PLF.
- (e):  Supply of gas is made to the customers including fertilizer plants by GAIL in accordance with the allocations  made  by  Gas  Linkage  Committee,  Empowered  Group  of  Ministers,  the  Empowered  Pool Management Committee or through any other mechanism, as the case may be.  Supplies to any of the customers  including  fertilizer  units  are  not  cut  arbitrarily.    However,  on  certain  rare  occasions,  for reasons beyond the control of the pipeline operator and to maintain the pipeline hydraulics & system integrity, supplies may need to be regulated for a short period for incremental quantities, but the supplies are maintained at the same level on aggregated basis.
- (f): The existing LNG regasification capacity in the country is  21.24 MMPTPA which includes 10 MMTPA Dahej Terminal, 5 MMTPA Kochi Terminal, 5 MMTPA Hazira Terminal and 1.24 MMTPA Dabhol Terminal. Though Kochi Terminal has been commissioned in September -2013, at present, the terminal is running at about 2% of its capacity due to delay in laying of Kochi-Koottanad-BangaloreMangalore pipeline in the states of Kerala and Tamil Nadu. PLL is in the process of Expanding its Dahej Terminal to 15 MMPTA which is scheduled to be completed by 2016.

*****