Domestic natural gas production fell 11.4% year-on-year (y-o-y) to 27,642 million metric standard cubic metre (mmscm) in 2020 as operations became increasingly unviable for energy production companies with government lowering selling prices.
The 2,426 mmscm of natural gas produced in December was however the highest monthly output recorded in the ongoing fiscal, with the commencement of production from Reliance Industries (RIL) and BP’s ultra-deep-water field in the KG D6 Block of the Krishna Godavari basin on the east coast of India.
Demand for the natural gas in the domestic market is traditionally dependent on the fertiliser (28%), power (23%), city gas distribution entities (16%), refineries (12%) and petrochemicals industries (8%). However, due to lower cars running during the coronavirus lockdowns, CGD consumption has been less than refineries in the current financial year. Domestic natural gas output fell 2.8% y-o-y to 31,168.4 mmscm in FY20, reversing the growth trend recorded since FY18.
Domestic production has been falling with the ageing of existing fields and muted response from the industry to take up new projects, mainly due to lack of adequate incentives. Other reasons for lower output in FY20