World Energy Outlook 2007

last seven years in the Krishna-Godavari basin. However, we expect production
to reach a peak between 2020 and 2030 and then to drop to 51 bcm at the end
of the projection period.
The outlook for India's gas production faces uncertainties similar to that for
oil. About 100 fields are already being appraised or developed, and they will
undoubtedly boost output in the next decade. But another 150 fields,
discovered in the last thirty years, are still awaiting appraisal. How quickly this
happens will depend on the business confidence and availability of both capital
and drilling rigs. We assume that the delay between the date of any discovery
and the start of production averages 8 years for larger fields, compared with
about 10 years for offshore projects in the recent past. The New Exploration
Licensing Policy (NELP) is expected to help speed up development. For
example, there are more than 20 Dhirubai fields in the Krishna-Godavari
basin, all of which were discovered since 2002, which are expected to start
producing as early as 2008 and gradually increase production up to 2015.
However, constraints on drilling activity are likely to limit the number of fields
that can be brought on stream in the near term. We assume that a maximum
of 17 fields can be brought into production on average each year between 2007
and 2021, resulting in delays between discovery and production of more than
8 years for a number of small fields.
There are other uncertainties surrounding gas production prospects. As
production shifts from the mature producing fields in the Mumbai basin on
the west coast to the relatively under-developed offshore Krishna-Godavari
basin on the east coast, substantial investment in transmission and distribution
infrastructure will be needed, especially in the south-east. Demand is currently
concentrated in the centre and the north. It is unclear whether the business
climate is interesting enough to attract all this investment, much of which is
expected to come from the private sector. In addition, although the NELP
provides for gas to be sold at market-related prices, it is not certain that end
users – notably power stations and fertilizer plants – will be willing or able to
pay (see Spotlight in Chapter 15).
Gas Imports
Gas imports are projected to double between 2005 and 2010, reaching about
12 bcm. Imports are then projected to stabilise before quadrupling between
2020 and 2030 as demand continues to grow and production peaks, reaching
61 bcm at the end of the projection period (Figure 17.7). Liquefied natural gas
import capacity, at two existing plants in Hazira and Dahej, currently amounts
to 10.2 bcm/year (Table 17.6). If another two plants currently under
construction, or planned, come to fruition, capacity would reach 24 bcm by
the middle of the next decade. This implies that, in the Reference Scenario,
India will have excess import capacity of about 10 bcm on average over the
17
Chapter 17 - Reference Scenario Supply Projections 501