India's Gas Demand Projected to Double by 2015

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Researched by Industrial Info Resources India (Delhi, India)--India's gas markets have evolved steadily over the past few decades through increased supply from Reliance Industries Limited's (BSE:500325) (Mumbai) KG-D6 field and liquefied natural gas (LNG) terminals at Dahej and Hazira. LNG imports are set to grow rapidly over the longer term at the Dabhol and Kochi LNG terminals as domestic consumption expands.

Current gas demand of 160 million standard cubic meters per day is expected to move up to 320 million standard cubic meters per day by 2015 and 600 million standard cubic meters per day by 2030, as domestic field development and LNG import deals make more gas available.

India is planning to expand its gas pipeline network by 40% in the next two to three years, according to the country's Minister for Petroleum & Natural Gas, Murli Deora. The expansion of the network will increase the number of cities with pipeline gas access and will allow India to divert liquefied petroleum gas (LPG) supplies to rural areas. By widening access to piped gas, India would be able to increase the use of compressed natural gas (CNG) in vehicles to help replace gasoline consumption. About 40 towns and cities currently have access to CNG, and 50% of India's population currently has access to LPG.

State-run GAIL (India) Limited (BSE: 532155) (New Delhi) is responsible for the operation of India's largest gas transmission network, which consists of 8,000 kilometers of existing pipeline; 4,100 kilometers of pipeline under construction; and 2,100 kilometers of planned pipelines; seven gas processing facilities with an aggregate production capacity of 1.3 million tonnes per year of liquefied petroleum gas, propane, pentane and sodium benzene phosphate; and the country's largest gas-fired petrochemicals complex with an installed polyethylene (PE) capacity of 260,000 tons per year.

The firm holds stakes in CNG projects in Mumbai, Delhi and Andhra Pradesh, as well as two projects in Egypt. GAIL is a partner in a 156-megawatt (MW) gas-fired power plant operated by Gujarat State Energy Generation Limited, as well as the Petronet LNG consortium (of which it owns 12.5%) that will deliver LNG to the Indian market. Over the past few years, GAIL has diversified into the domestic exploration and production sector, holding stakes in 11 blocks in India and one in Myanmar.

GAIL plans to invest about $8.8 billion in a range of projects by March 2015 and will increase the length of its gas pipeline network from 7,847 kilometers to 15,000 kilometers. It also plans to double the capacity of its gas-fed petrochemicals plant at Pada in Uttar Pradesh from 450,000 tonnes per year to 900,000 tons per year to cope with a surge in Indian demand for plastics and synthetic rubber.

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