Domestic natural gas production rose 21% in April-September – News Couple
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Domestic natural gas production rose 21% in April-September


Production also started on August 31 from the State Oil and Natural Gas Corporation’s (ONGC) U1B deepwater gas well located in the KG-DWN 98/2 complex, which has an estimated peak production of 1.2 million standard cubic meters per day (mscmd).

Domestic natural gas production rose 21% to 16,890.9 million standard cubic meters in the first half of the current fiscal year on an annual basis, mainly due to increased production from Reliance Industries Ltd (RIL) and from BP’s ultra-deep field in the KG-D6 block of the Basin. Krishna Godavari on the East Coast. Output fell 8.1% year over year to 2,8670.6 milliseconds in fiscal year 21.

Production also started on August 31 from the State Oil and Natural Gas Corporation (ONGC) U1B deep water gas well located in the KG-DWN 98/2 complex, which has an estimated peak production of 1.2 million standard cubic meters per day (mscmd).

Fortunately, the rise in domestic production coincided with a significant jump in international LNG prices, which reduced the dependence on natural gas imports from 54% in April-September 2020 to 49% in the corresponding period of this year. In the first six months of the fiscal year, the volume of LNG imports decreased by 0.8% year-on-year to 15,678 million cubic meters. However, the value of imports in the same time frame increased by 71% year over year to reach $5.3 billion.

Spot LNG prices in Asia jumped from $6.9/mt at the start of the fiscal year to $17.7/mb at the end of August. Prices topped $33/MMBtu in early October amid low inventories, high demand and limited supply of the fuel, and are currently trading at around $35/MMBtu.

The demand for natural gas in the domestic market has traditionally been dependent on fertilizers, city gas distribution entities, power, refineries and petrochemical industries. The impact of higher LNG prices is being felt disproportionately among users, depending on factors such as access to cheaper domestic gas and government subsidies. Also, since most of the LNG imports are carried out under long-term contracts at predetermined prices, the rise in final prices in the country is much less than the rise recorded in global spot prices.

The Union government recently raised the price of domestically produced gas under the managed price mechanism by 62% to $2.9/MMBtu, valid for six months from 1 October. On the east coast, it increased by 69% to $6.13 / million tons. The country’s crude oil production of 14.9 million tons during the month was 3.2% lower than production in the same period last year. About 85% of the country’s crude oil needs must be imported.

ONGC’s production during April-September 2021 was 9.7 metric tons, 4.4% lower than production during the corresponding period last year, mainly due to the impact of coronavirus and rainfall on operations. Crude oil imports rose 12.9% to 100.7 million tons in the first half of the fiscal year while the value of imports rose 127.7% to $51 billion in the same period.

The price of India’s basket of crude is currently around $82 a barrel, up from $69 a barrel in mid-August, buoyed by recovery in global demand and limited production from major oil exporting countries.

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