NEW DELHI, June 27: India’s discovery of a large natural gas field will not affect plans to build trans-national gas pipelines, the country’s oil minister said on Monday, but analysts said the new find may hurt the ambitious projects. “I don’t think it will impact the current projects. The projects are based on modest projections of economic growth,” Mani Shankar Aiyar told reporters.
State-run Gujarat State Petroleum Corp (GSPC) said on Sunday it found 20 trillion cubic feet (tcf) of gas in a deep-sea block of the Krishna-Godavari basin, where Reliance Industries Ltd discovered 14 tcf of gas in 2002.
The company has an 80 per cent stake in the KG-OSN-2001/3 field in the Bay of Bengal, while Canada’s GeoGlobal Resources Inc and India’s Jubilant Enpro Ltd have minority stakes.
India has in place gas reserves of 82 tcf and output meets barely half the demand, forcing the country to begin liquefied natural gas (LNG) imports last year and to negotiate with Iran, Turkmenistan and Myanmar to import piped gas.
Analysts said the new discovery had the potential to derail plans to import piped gas if the reserve is found to be as large as the initial estimate and commercially viable.
“Twenty tcf is huge. That’s considerable enough to have a dent,” said Vishvjeet Kanwarpal, CEO of Asia Consulting Group in New Delhi.
Officials said the new field needed detailed tests.
“They have made a rough calculation. A lot of work needs to be done. You can say the initial testing is encouraging,” the oil ministry’s Director General Hydrocarbons V.K. Sibal told Reuters.
Sibal said the high temperature and pressure in the well would pose problems.
“It is a frontier well. There are bound to be problems. The equipment, measuring instruments will have some challenges.”
But GSPC Managing Director D.J. Pandian was upbeat and said the company would raise resources from the capital market and start commercial production by August 2008.
India is encouraging the use of gas by industrial units, buses and taxis, generating surpluses of liquid fuels such as naphtha, and to a lesser extent diesel for exports.
It plans to import 7.5 million tons of LNG in 2005-06, including 2.5 million tons by Royal Dutch/Shell which built India’s second LNG terminal this year.
Earlier this month, India signed an agreement with Iran to import 5 million tons of LNG from the end of 2009.
India and Pakistan also issued a joint statement in Islamabad this month saying both countries would give top priority to a $4 billion project to lay a gas pipeline from Iran to South Asia.
—Reuters