Gasping for gas
According to the power ministry, due to high cost and uncertainty in availability of gas, only 2,114 mw gas- based power plants have been projected in the 11th Plan.
By Rajeev Jayaswal, TNN |
POWER plants are choking due to lack of natural gas. While the sector requires about 61 mmscmd of gas for maintaining 90% plant load factor (PLF), the supply is a mere 40 mmscmd. This requirement is expected to touch 90 mmscmd in 2011-12. Hopes of gas-based power plants are now pinned on companies like Reliance Industries (RIL), GSPC and ONGC, as their gas finds may soon flow through pipelines.
Even though gas is a relatively clean fuel, but due to uncertainties over its availability, only 2,114 mw gas-based power generation capacity is planned in the 11th Five-Year Plan (2007-12). This excludes NTPC’s gas-based projects (2,600 mw) at Kawas and Gandhar, where the supplier RIL refused to honour the contract. The matter is currently sub judice.
It is projected that 68,869 mw power generation capacity (15,585 mw hydel, 50,124 mw thermal and 3,160 mw nuclear) would be added during the 11th Five-Year Plan (2007-12). This comprises 46,635 mw coal-based plants, 2,114 mw gas-based plants and 1,375 mw lignite based-power plants.
Non-availability of adequate gas is a major disadvantage as gas-based stations have comparatively shorter gestation period and are easier to operate. According to the report of the working group on power, 89 mmscmd of gas is required at 90% PLF in the terminal year of the 11th Plan. At present, the availability of gas is to the order of 40 mmscmd, which is not even sufficient to meet the current requirement. “Gas supply to existing gas-based power stations has been inadequate and the plants have been operating at around 58-60 PLF.
According to the power ministry, due to high cost and uncertainty in availability of gas, only 2,114 mw gas-
based power plants have been projected in the 11th Plan.
On the supply side, the petroleum ministry projecting an optimistic scenario has put domestic supply of gas at 190 mmscmd by 2011-12. Coupled with 83.12 mmscmd (23.75 mmtpa) LNG imports, the entire availability of gas in the terminal year of the 11th Plan would be around 273 mmscmd.
A further review of the supply side reveals that the current domestic production of natural gas is around 32-33 bcm per annum. According to a rough estimate, public sector companies (ONGC & OIL) are likely to enhance their gas production from 25.23 bcm in 2007-08 to 26.12 bcm. The gas production through joint ventures and public sector companies is estimated at around 8.6 bcm in 2007-08, which may touch 23 bcm in 2011-12, if gas from the newly-discovered fields including RIL’s KG basin start flowing. Thus, at the terminal year of the 11th Plan, in the base case scenario, the indigenous production of gas would be around 49 bcm.
An estimate by the India Hydrocarbon Forum, however, suggests that gas demand by 2011-12 would be around 313 mmscmd (114 bcm). In such scenario, shortage of natural gas would be met through either import of LNG or through transnational pipelines.
No doubt, there is a shortage of gas to fuel domestic industry. Under these circumstances, there is a need to ensure gas supply to the power plants. In order to meet gas requirement of power plants, the working group has suggested that, “while granting open access for transportation of gas to sectoral players, preference should be given to existing customers”.
Under the NELP rounds, the government awards prospective hydrocarbon blocks to exploration & production (E&P) companies and the deal is formalised through production sharing contracts (PSCs). As per the agreement, a company agrees to give a certain percentage of oil and gas (profit oil or profit gas) to the government as its share, in case a discovery in the block is made.
rajeev.jayaswal@timesgroup.com
Even though gas is a relatively clean fuel, but due to uncertainties over its availability, only 2,114 mw gas-based power generation capacity is planned in the 11th Five-Year Plan (2007-12). This excludes NTPC’s gas-based projects (2,600 mw) at Kawas and Gandhar, where the supplier RIL refused to honour the contract. The matter is currently sub judice.
It is projected that 68,869 mw power generation capacity (15,585 mw hydel, 50,124 mw thermal and 3,160 mw nuclear) would be added during the 11th Five-Year Plan (2007-12). This comprises 46,635 mw coal-based plants, 2,114 mw gas-based plants and 1,375 mw lignite based-power plants.
Non-availability of adequate gas is a major disadvantage as gas-based stations have comparatively shorter gestation period and are easier to operate. According to the report of the working group on power, 89 mmscmd of gas is required at 90% PLF in the terminal year of the 11th Plan. At present, the availability of gas is to the order of 40 mmscmd, which is not even sufficient to meet the current requirement. “Gas supply to existing gas-based power stations has been inadequate and the plants have been operating at around 58-60 PLF.
According to the power ministry, due to high cost and uncertainty in availability of gas, only 2,114 mw gas-
based power plants have been projected in the 11th Plan.
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The power sector is not the lone consumer of gas. Other contenders are fertiliser companies, city gas supplies, petrochemical and refining plants, sponge iron and steel plants and other industries. According to the ministry of petroleum, total demand is expected to touch 179 mmscmd in 2007-08. By 2011-12, this demand is expected to cross 280 mmscmd.On the supply side, the petroleum ministry projecting an optimistic scenario has put domestic supply of gas at 190 mmscmd by 2011-12. Coupled with 83.12 mmscmd (23.75 mmtpa) LNG imports, the entire availability of gas in the terminal year of the 11th Plan would be around 273 mmscmd.
A further review of the supply side reveals that the current domestic production of natural gas is around 32-33 bcm per annum. According to a rough estimate, public sector companies (ONGC & OIL) are likely to enhance their gas production from 25.23 bcm in 2007-08 to 26.12 bcm. The gas production through joint ventures and public sector companies is estimated at around 8.6 bcm in 2007-08, which may touch 23 bcm in 2011-12, if gas from the newly-discovered fields including RIL’s KG basin start flowing. Thus, at the terminal year of the 11th Plan, in the base case scenario, the indigenous production of gas would be around 49 bcm.
An estimate by the India Hydrocarbon Forum, however, suggests that gas demand by 2011-12 would be around 313 mmscmd (114 bcm). In such scenario, shortage of natural gas would be met through either import of LNG or through transnational pipelines.
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According to estimates, negotiations with Australia, Iran and Qatar may result in the import of 54 mmscmd (about 19 bcm per annum) of natural gas by 2011-12. LNG terminals at Dahej (7.5 mmtpa), Dabhol (5 mmtpa), Cochin (2.5 mmtpa) and Hajira (2.5 mmtpa) are also expected to augment gas availability in the country. An additional 2.5 mmtpa each is also proposed for Dahej, Cochin and Hajira LNG terminals.No doubt, there is a shortage of gas to fuel domestic industry. Under these circumstances, there is a need to ensure gas supply to the power plants. In order to meet gas requirement of power plants, the working group has suggested that, “while granting open access for transportation of gas to sectoral players, preference should be given to existing customers”.
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It has also suggested that the government’s quota of gas from the New Exploration Licensing Policy (NELP) blocks should first be utilised to meet the shortfall in supply from the linkage of existing customers before allocation to others.Under the NELP rounds, the government awards prospective hydrocarbon blocks to exploration & production (E&P) companies and the deal is formalised through production sharing contracts (PSCs). As per the agreement, a company agrees to give a certain percentage of oil and gas (profit oil or profit gas) to the government as its share, in case a discovery in the block is made.
rajeev.jayaswal@timesgroup.com
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