India will begin importing gas in the form of liquefied natural gas from early 2004 to augment deficit in domestic production, Petroleum Minister Ram Naik said.

Public sector Petronet LNG's 5 million tonnes (20 million standard cubic meters per day) capacity import terminal at Dahej in Gujarat is 85 per cent complete and it is scheduled for completion by December 2003, he said at the Consultative Committee meeting of his ministry on Wednesday evening.

"Commercial supplies with start soon after the completion," he said, adding for distribution of regassified LNG, Gail is laying pipelines from Dahej to Bijaipur at the cost of Rs 2,900 crore (Rs 29 billion) and Dahej to Uran, near Mumbai, at the cost of Rs 1,400 crore (Rs 14 billion).

Stating that demand for natural gas far exceeded the availability, he said as against the present demand of 119 mmscmd, the supply of gas is limited only to around 65 mmscmd.

As per the India Hydrocarbon Vision 2025, the demand of natural gas will increase to 231 mmscmd by 2006-07 and to 313 mmscmd by 2011-12. It will reach 391 mmsmcd by 2024-25.

Naik said state-run Gail has also conceptualised a National Gas Grid project linking various gas sources and potential markets through inter-state high-pressure gas pipeline network.

"This project would help in optimal and efficient utilisation of gas within various parts of the country," he said adding in the first phase upto 7000-km of cross-country pipeline would be laid at an estimated cost of Rs 18,000 crore (Rs 180 billion) in the next 5-7 years.