The oil and gas industry in India dates back to 1889 when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam. The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam and Maharashtra (Bombay high). As of 31 March 2018, India had estimated crude oil reserves of 594.49 million tonnes (MT) and natural gas reserves of 1339.57 billion cubic meters (BCM).
India imports 82% of its oil needs and aims to bring that down to 67% by 2022 replacing it with local exploration, renewable energy and indigenous ethanol fuel. India was the second top net crude oil (including crude oil products) importer with totals of 205.3 Mt in 2019.
Natural gas landscape in India
By March 2021, India’s domestic crude oil production output fell by 5.2% and natural gas production by 8.1% in the FY2021 as producers extracted 30,491.7 Thousand Metric Tonnes (TMT) of crude oil and 28670.6 Million Metric Standard Cubic Metres (MMSCM) of natural gas. In August 2021, crude oil production decreased by 2.3%, and there was a 20.23% increase in home-grown natural gas production.
India held 43 trillion cubic feet (Tcf) of proven gas reserves as of 2017, ranking 22nd in the world, accounting for over 1 % of world’s total natural gas reserves of 6,903 (Tcf). The country thus has proven reserves equivalent to 22.1 times its annual consumption, meaning that India has about 22 years of gas left at current consumption levels, excluding unproven reserves.
In summary, the following are the highlights:
- India consumed 1,957,546 million cubic feet (MMcf) of natural gas per year as of the year 2017-18.
- India now ranks 14th in the world for natural gas consumption, accounting for about 1.5% of the world’s total consumption of 132,290,211 MMcf.
- India consumed 1,462 cubic feet of natural gas per capita every year (based on the 2017-18 population of 1,338,676,785 people), or 4 cubic feet per capita per day.
Variability Million Cubic Ft (MMcf)
Gas Reserves 50,398,000
Gas Production 1,113,364
Gas Consumption 1,753,143
Yearly Deficit -619,778
Yearly Imports 659,331
Yearly Exports 9,535
Net Imports 649,796
(Data shown in the summary table above is 2016-17, the latest year with complete data in all categories)
Context of natural gas in country’s industrial development
The commercial sector uses natural gas in a variety of sectors and industrial activities ranging from heating buildings and water, to operating refrigeration and cooling equipment, to cooking, to drying clothes, and to providing outdoor lighting. Some consumers in the commercial sector also use natural gas as a fuel in combined heat and power systems. Natural gas, from a usage point of view, can thus be categorized as the most important source of energy in sectors such as fertilizer, power, refinery, petrochemicals, residential, energy and transportation, accounting for more than 80% of the total consumption, contributing approximately 30% to the country’s gross national product, and employing around 20% of total workforce in the country. A summary table below demonstrates the distribution of natural gas consumption in 2021 by sectors.
Sectors Distribution of natural gas consumption
Fertilizer Industry 29%
Local Natural Gas Distribution Network 15%
Including Road Transport
Internal Consumption for Pipeline System 1%
LPG Shrinkage 1%
Industrial and Manufacturing 1%
Sponge Iron 1%
Source: Statista, 2021 (https://www.statista.com/statistics/1126695/india-natural-gas-consumption-share-by-sector/)
Correlation between use of natural gas and carbon emissions
Rise in temperature is a cause of major concern across the globe. However, the level of carbon dioxide emission and the increase in temperature can be controlled by replacing petroleum oil and coal consumption with natural gas as a transition fuel in bid for India to be able to cut its emissions by 50% by 2030 before going net zero by 2070 as per country’s renewed climate pledge made at the COP 26 in Glasgow.
Natural gas in India is emerging as the preferred fuel of the future in view of it being an environmental friendly economically attractive fuel and also a desirable feedstock. Increased focus needs to be given to this potential sector. (India’s Hydrocarbon Vision 2025, Ministry of Petroleum, Government of India), also available at http://petroleum.nic.in/sites/default/files/vision.pdf).
Natural gas in India is poised to act as a substitute to coal in short to medium term and likely be leveraged as a transition fuel in the long term before fully aligning with clean energy elements through renewable sources and innovative energy mixing, going forward.
This Post was submitted by Climate Scorecard India Country Manager Pooran Chandra Pandey