Natural gas-starved India is all set to turn into a surplus country in another three to four years, thanks to the recent Myanmar gas discovery by an Indo-Korean consortium.

On the flip side, no fresh investment is coming up in the fertiliser and power sectors to make use of the surplus gas. The power sector consumes 44 per cent of the gas being produced in the country, fertiliser sector 27 per cent, sponge iron units 5 per cent and others 24 per cent.

The petroleum ministry has already started reworking its projections regarding the demand and supply of natural gas in the wake of indications that the entire production of around 15-20 million standard cubic metres per day (mmscmd) of gas from the field with 4-6 trillion cubic feet (TCF) reserves may be available to India for import.

The finance ministry has also been informed about the possible gas-surplus situation so that it can work out specific investment proposals in the downstream sector to make the maximum use of the available gas.
 
While the natural gas working group for the Tenth Five-Year Plan had indicated that the domestic production of gas would be 79.80 mmscmd in the terminal year of the Tenth Plan (2006-07), the gas discoveries in the Krishna-Godavari basin and other areas and the potential for more such finds had changed the scenario considerably.

The working group had apparently made its assessment before the Reliance find. Even otherwise, the official estimate of the size of this discovery has been increasing by the day.

Avinash Chandra, former director general of hydrocarbons, had said at the roadshow organised for the fourth round of bidding under New Exploration Licensing Policy that Reliance would produce 45 mmscmd of gas from 2006-07.

"We anticipate gas production from D6 blocks of Reliance would be 45 mmscmd from 2006-07," he said and added that domestic gas production would increase from the current 70 mmscmd to 142 mmscmd in 2006-07, the major addition coming from the Reliance field.

Add to this the 5 million tonnes of liquefied natural gas being imported by Petronet LNG. This can easily take the gas availability to 180 mmscmd.

The working group has estimated that in 2006-07, the domestic gas demand can be in the region of 179 mmscmd. This will imply that the domestic production of natural gas along with the imported LNG will match the domestic demand.

However, even these production estimates do not take into consideration the huge gas potential of the Krishna-Godavari basin. Even Reliance has so far explored only 20 per cent of the exploration acreage awarded to it in the D6 block.

In case the Myanmar gas also comes in by the end of the Tenth Plan, there can be the problem of plenty so far as natural gas is concerned.

Since no worthwhile investment is coming in the two major user sectors -- power and fertiliser -- and it will involve heavy expenses in laying of pipelines for the transport of this gas if it has to be provided to small users, it is feared that there will be a situation where the country will be importing costly LNG and natural gas while the inexpensive domestic gas will go abegging.