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  • The gas sector has seen some significant policy developments in the past one year. The government has taken constructive decisions to liberalise the sector by simplifying processes, increasing market access and encouraging the use of technology to enhance efficiency.

  • One of the biggest reform measures has been the launch of the Open Acreage Licensing Policy (OALP) along with the National Data Repository. By allowing E&P companies to choose the areas they want to explore, the new policy attempts to address a major drawback of the NELP regime that forced exploration companies to bid for projects chosen by the government.
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  • The new policy also gives the government a chance to attract exploration companies that are more serious about doing business. Already, about 50 expressions of interest have been received under OALP for an area of 50,000 square km.

  • Some of the other key policy developments are unified licensing, a shift to revenue sharing, providing marketing and pricing freedom to operators for discoveries in high-pressure, high-temperature and deepwater and ultra deepwater areas.

  • Meanwhile, the Discovered Small Fields (DSF) policy, introduced by the government in 2015, received a reasonably positive response from investors. The progressive features of the policy and greater fiscal incentives led to several new players entering the E&P space. A total of 44 fields have been awarded under the first round of bidding. The government is soon planning to come out with the second round of bidding.

  • The gas supply situation remained static in 2016-17 with domestic production standing at 88 mmscmd, a marginal decline of about 1 per cent over 2015-16.

  • The shortfall in domestic gas supply continues to be met by LNG imports. The present share of LNG imports in the total supply has almost doubled to around 45 per cent from the level in 2010-11. Positive developments such as a reduction in the basic customs duty on LNG imports, renegotiation of long-term LNG contracts and falling spot LNG prices have made LNG imports even more lucrative for Indian companies.

  • India is also diversifying its sourcing options to ensure procurement at competitive prices. The LNG supplier base has widened substantially to include imports from Australia, the US, Nigeria, Yemen, Algeria and Oman.

  • However, over the next few years, incremental production of 50-55 mmscmd of domestic gas supply is expected from the existing acreages alone. In addition, production from DSF and the OALP fields will add significantly to the output.

  • In the CGD space, new bidding rounds - the seventh and the eighth - were rolled out by PNGRB in 2016. However, the bidding response was lukewarm with only one GA being sanctioned under the seventh round. On the positive side, in the past two years, PNGRB has granted authorisation to lay, build, operate and expand the CGD network in almost 25 cities under bidding rounds five, six and seven.

  • In contrast, not much progress has been made in the pipeline segment. Utilisation of the existing pipelines remained low. Further, the development of new pipelines was slow owing to viability and right-of-use issues.

  • Meanwhile, IT penetration has been growing with gas utilities seeking greater customisation from IT vendors for their unique business requirements. Technologies and solutions are being deployed across various segments such as enterprise resource planning to streamline business processes, smart metering for data collection, supervisory control and data acquisition (SCADA) and geographic information systems for asset management, customer relationship management (CRM) for improving consumer interface, etc. At the same time, the industry is paying increased attention to customisation and integration of information technology (IT) and operational technology (OT).

  • The mission of this conference is to discuss the recent trends and developments in the natural gas sector, highlight key issues and concerns, and examine the way forward in light of the recent policy and regulatory initiatives. The conference will also identify new and emerging opportunities, and showcase some of the noteworthy technologies and best practices.
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