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Natural Gas
Introduction
Natural gas, also simply known as gas, consists primarily of methane and is an important source of fuel, feedstock for fertilizers and a potent greenhouse gas. It undergoes extensive processing before it is actually usable. The processing involves removal of all other material except methane. The by-products of that processing include ethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons, elemental sulfur, carbon dioxide, water vapor, and sometimes helium and nitrogen.
Uses of natural gas include power generation, domestic gas usage, transportation (through CNG), fertilizers, aviation, hydrogen production, manufacture of glass, plastics, steel, fabrics, paint, etc. Natural gas is not easy to transport owing to its low density. Hence, usage of natural gas depends on the availability in nearby areas. Cross-country pipelines of natural gas are practically difficult. LNG carriers transport liquefied natural gas (LNG) across oceans, while tank trucks can carry liquefied or compressed natural gas (CNG) over shorter distances.
Natural gas trucks and carriers may transport natural gas directly to end-users, or to distribution points such as pipelines. Natural gas has emerged as the most preferred fuel due to its inherent environmentally benign nature, greater efficiency and cost effectiveness. The demand of natural gas has sharply increased in the last two decades at the global level. In India too, the natural gas sector has gained importance, particularly over the last decade, and is being termed as the Fuel of the 21st Century.
Global Scenario
Proved natural gas reserves across the world total to 187.49 trillion cubic meters; of which Middle-East holds 76.18 trillion cubic meters and the Europe & Eurasia hold 63.09 trillion cubic meters. Asia-Pacific has proven reserves of about 16.24 trillion cubic meters of which India has 1.12 trillion cubic meters.
Total Natural gas consumption across the world was 2940 billion cubic meters in 2009 of which 1058 billion cubic meters were consumed by Europe & Eurasia, while India consumed 51.9 billion cubic meters. Total Asia-Pacific consumption in 2009 was 496 billion cubic meters, whereas North-America consumed 810 billion cubic meters.
Total Natural gas production across the world was 2987 billion cubic meters in 2009 of which 973 billion cubic meters were produced by Europe & Eurasia, while India produced 39.3 billion cubic meters. Total Asia-Pacific production was 438 billion cubic meters in 2009, while North-America produced 813 billion cubic meters. Production in Middle-East region was 407 billion cubic meters in the same period.
Indian Scenario
Production of natural gas, which was almost negligible at the time of independence, is at present at the level of around 107 million standard cubic meters per day (MMSCMD). The main producers of natural gas are Oil & Natural Gas Corporation Ltd. (ONGC), Oil India Limited (OIL) and JVs of Tapti, Panna-Mukta and Ravva. Under the Production Sharing Contracts, private parties from some of the fields are also producing gas.
Government have also offered blocks under New Exploration Licensing Policy (NELP) to private and public sector companies with the right to market gas at market determined prices. Most of the production of gas comes from the Western offshore area. The on-shore fields in Assam, Andhra Pradesh and Gujarat States are other major producers of gas.
Smaller quantities of gas are also produced in Tripura, Tamil Nadu and Rajasthan States. OIL is operating in Assam and Rajasthan States, whereas ONGC is operating in the Western offshore fields and in other states. The gas produced by ONGC and a part of gas produced by the JV consortiums is marketed by the GAIL (India) Ltd. The gas produced by OIL is marketed by OIL itself except in Rajasthan where GAIL is marketing its gas. Gas produced by Cairn Energy from Lakshmi fields and Gujarat State Petroleum Corporation Ltd. (GSPCL) from Hazira fields is being sold directly by them at market determined prices.
Natural gas has been utilised in Assam and Gujarat since the sixties. The gas produced in Gujarat, Assam, etc; is utilised within the respective states. Natural Gas is currently the source of half of the LPG produced in the country.
LPG is now being extracted from gas at Duliajan in Assam, Bijaipur in M.P., Hazira and Vaghodia in Gujarat, Uran in Maharashtra, Pata in UP and Nagapattinam in Tamil Nadu. Around 32% of total gas production is supplied to the fertiliser sector, 41% to power, 4% to sponge iron and the balance 23% (including shrinkage) goes to other sectors.
Price influencing factors
- Demand - Supply
- Inventory conditions
- Weather - extreme hot/cold weather conditions affect power/heat usage
- Geo-political issues (when trans-national pipeline are involved)
