Higher domestic gas supply to cut import of LNG

New Delhi, Aug. 20: Helped by new output from KG-D6 fields of Reliance-BP, India’s domestic gas production, which had been falling for more than a decade because of declining output from legacy fields, now looks in rude health, according to energy consultancy Wood Mackenzie.

Reliance Industries Ltd and its partner BP Plc of UK in December last year started putting the second wave of gas discoveries in eastern offshore KG-D6 block to production with R-Series started flowing gas. In April they started output from the Satellite Cluster fields.

This helped raise India’s gas production by almost 20 per cent, oil ministry data showed.

In the weekly blog APAC Energy Buzz, the energy consultancy’s Asia Pacific vice-chair Gavin Thompson said India’s domestic gas production has been in a sorry state for years.

“With output falling for more than a decade as legacy fields decline, India’s modest upstream prospectivity and challenging E&P regime have proven stubborn deterrents to new investment.

This proved to be good news for LNG. As domestic production has stalled, LNG imports have filled the gap. “But this story is changing rapidly. After years of slow progress, the Relia-nce and BP deepwater KG-D6 fields are coming onstream, bringing over 900 million cubic feet a day into the market from its three phases combined and set to provide over a quarter of India’s total gas output by 2025,” he said.

With further supply from ONGC and Vedanta, “India’s domestic gas sector now looks in rude health.”