Natural gas production set to improve by next year

According to DGH projections, worse seems to get over by next year for country’s natural gas sector as the gas supply situation is expected to start improving, though slowly, by then. According to the projections, gas production (under the Production Sharing Contract) is expected to rise from 33.61 mmscmd in 2013-14 to about 45.21 mmscmd in 2016-17.

When natural gas supply from KG basin is falling continuously, news from coal bed methane (CBM) front is not so depressing. In fact, according to the projections under the Production Sharing Contract (PSC) regime by the DGH, average CBM production is set to rise from 0.8 mmscmd expected in 2013-14 to about 8.47 mmscmd in 2016-17, that is, a rise of more than ten times. Output from CBM sector is set to triple during the current year itself and is set to rise further in the coming years.

CBM from Raniganj East block, operated by Essar, is likely to go up to over 3.56 mmscmd in 2016-17 from the current level of just about 0.49 mmscmd. Output from Raniganj South block, operated by Great Eastern Energy Corporation Ltd (GEECL), is expected to rise to 3mmscmd in 2018-19 from 0.57mmscmd in 2013-14. RIL’s two blocks, Sohagpur East and Sohagpur West, expected to contribute a cumulative 2.8 mmscmd by 2016-17. At present both these blocks are under development.

However, production from KG-D6 is unlikely to show any major uptrend during the period. Production is expected to go up marginally from 19.17 mmscmd in 2013-14 to about 19.78 mmscmd in 2016-17. Output from KG-D6 is expected to fall further in 2014-15 and 2015-16. Falling production will be arrested only in 2015-16 and thereafter production trend is expected to move upwards. However, there is good news from KG basin as Deen Dayal West block, operated by GSPC, is expected to commence production in December 2013. Production from this block is expected to reach 5 mmscmd by 2016-17. Production from D-55 and D-34 with estimated gas reserves of about 2.8 TCF, is expected to start only after 2016-17. Also, RIL’s R series fields are expected to commence production from 2017-18 which will add another 11 mmscmd of natural gas.

Production from pre-NELP blocks is expected to come down to 11.71 mmscmd in 2016-17 from 13.04 mmscmd in 2013-14. Panna-Mukta field is expected to produce about an average 5.34 mmscmd gas during the current year, followed by Mid & South Tapti which would bring in an additional 3.44 mmscmd in 2013-14. On the other hand, cumulative production from NELP blocks is expected to rise up from 19.77 mmscmd in 2013-14 to 25.02 mmscmd in 2016-17, thanks to expected gas production at DDW.

Gas output from blocks under the PSC regime is expected to go up by 5.7% from the current level by March 2014. Current production from these blocks is 33.34 mmscmd which is expected to reach 35.33 mmscmd by March 2014.