Natural Gas: As Source Of energy

New Perspective And Challenges
The process of globalization has enunciated rapid and sustained economic growth in the global economies, leading to major structural and policy changes. These process of changes is having direct major impact on all the sectors of the economy, particularly the energy Sector,world wide.
Economic development has been associated world wide increased use of energy and the consequent increase in productivity. The oil shock of the seventies,the technology upgradations for improved efficiencies have led to the lowering of the share of oil in the world energy mix. Further, natural gas is gaining importance as an attractive alternative to the relatively scarce Oil and its global availability is expected to increase considerably in the future. Moreover, environmental and safety concern have highlighted the attraction of natural gas over coal and unclear power.
In the global scenario currently Natural Gas represents 11% of the energy consumption in the Asia-Pacific region as against 24% in the United States of America. In India, the natural gas is emerging as the important source of energy accounting of 8% of the fuel demands. However,the Asia-Pacific region is projected to show the highest growth rates in energy demand in the coming years, primarily due to rising demand in China and India. This region is heavily dependent on hydrocarbons as source of energy. Against a total world gas reserves estimated at 142 trillion cubic Meters(TCM), the Asia-Pacific region has only 7% of this reserves with roughly 60% of the world's population in the region. Thus, in the long run,this region would emerge as the net important of Natural Gas.
In India, Natural Gas is relatively a new entrant to the Energy Sector. The first major discovery of South Bassin Gas Fields in the Mumbai Offshore region, facilitated efforts to augment the production of non-associated gas in the country. Earlier most of the production was associated gas,and its use largely localized or flared/re-injected.
Setting up of Gas Authority of India Limited is 1984 as a public sector to handle all mid-stream(pipeline,transportation and ancillary functions) and down-steam(gas processing and utilization), marked the beginning of a concerted effort to develop Natural Gas as a important source of Energy in India. Today the total Natural Gas production profile in India is as below:

Gas Production	31.6 BCM
Captive consumption	7.6BCM
Net availability	24.0 BCM

The Pipeline infrastructure extends to around 3900 kms. network covering various states which includes the 1700 km. HBJ high pressure cross country pipeline of GAIL . In the Gas processing and utilization, LPG though represents a small fraction of the total refined products in India but its consumption has rapidly expanded.Domestic consumption account for 93% and balance 7% for Industrial and Commercial consumption. Today the production of LPG in the Country is around 4.7 million tones living a huge demand supply gap of approximately 4.5 million tonnes.
However, following fundamental forces are expected to re-shape the Indian Natural Gas industry in the millennium.

Energy requirement.
Environmental Legislation.
Policy and Structural changes.

The resultant importance of Natural Gas,will see major changes in terms of
Emergence of competition in the gas sector.
Emergence of Gas Regulatory body.
Significantly higher investments in sourcing and marketing of natural gas.
The above changes will transform the Indian Natural Gas industry into a dynamic and competitive business environment. The current scenario of the Industry dominated by the state owned companies will get transformed into a scenario with both private and public sector players and competition in all segments of the gas value chain i.e. right from sourcing, transmission, distribution and marketing upto utilization.
In fact, with the announcement by the Govt. of India of the New Exploration Licensing Policy in March 1996,the process to open up to Hydrocarbon Sector to Private Investment started.
The major thrust area for the Natural Gas Industry in the coming years would be on Sourcing as demand for natural gas all over the world increases, supplies in India are expected to fall short of registered demand. The demand and supply gap in India is projected to increase from 85 MMSCMD in 2000 AD to around 125 MMSCMD by 2010 AD, in spite of large gas supply additions during this period.
The emphasis on sourcing of Natural Gas will see:
Enhancement of Indigenous gas production through higher investment and covering the current discoverable reserves into established reserves.
Important of Natural Gas either through trans-national pipelines or in the form of LPG.
Setting up of LNG import facilities on the West/East coast.
Enhancement in efforts on Coal Bed Methane (CBM) with an estimated potential between 30 to 144 TCF based on 13 major coal fields in India. In fact, there are plans to offer 12 blocks for exploration and production of CBM.
Enhancement of efforts on Gas Hydrates. In India vast areas on the east and west coasts provide very favourable conditions for the existence of Natural gas hydrates,. As indicated,the total amount of methane in gas hydrate around the world is likely to have resources of the order of 510 TCM of methane gas, which is more than 2.5 times the present discovered resources of Natural Gas.
The other business segment in the Gas-value chain, viz. Transmission, distribution and marketing will see development of extensive Pipeline network and possibly integrated into a National Gas Grid, depending upon the development of gas market.
In Natural Gas processing and utilization according to the Planning Commission estimates, use of LPG as cooking and Industrial fuel will still dominate and account of approximately 90% of the total market in a next few years. Annual LPG Production is expected to grow by 14.2% from the current production of 4.79 million tones. With the liberalization and removal of Govt. subsidies and APM pricing more projects will come up to take advantage of the growing market.
Power generation, where the share of Natural Gas world wide is around 16% in 1995 is expected to rise to 23% by 2015 AD.Similarly in India, with the demand for electricity rising at a very fast pace, Natural Gas will be emerging as a major fuel for Electricity generation. Currently there is huge demand and supply gap in India with peak shortage of around 18.5% and Energy shortage is around 9.2%.The majority of new Power Generation in the long run will come from either coal or from liquefied Natural Gas (LNG). The other utility area where Natural Gas will be a major feed stock is Petrochemiclas. In the emerging Petrochemical market with a growth rate of over 15-18% annually which is almost 3 times of GDP will provide a good market for Natural Gas.
In above context, there is undoubtedly, new perspective to Natural Gas, as an alternate source of energy and lies ahead great challenges in the coming years. In India, the Natural Gas sector is poised for a growth and will see the current scenario converting into a competitive business environment. The Indian Public sector grants ONGC, OIL and GAIL in the upstream sector is faced with great opportunities and threats in the expected scenario. The answer to these opportunities and threats is consolidation, expansion and diversification on the Gas value chain based on long term strategic plan and supplementing the process through re-structuring within.