India's natural gas demand to double by 2015

This demand would be driven by the refining and petrochemical industry (35 mmscmd), the power sector (5 mmscmd) and city gas distribution (about 10-12 mmscmd), according to McKinsey

India's natural gas demand is expected to nearly double to 320 million standard cubic meters per day (mmscmd) by 2015, global consultancy firm McKinsey said in a study on Monday, reports PTI.

In a report released at the VI Asia Gas Partnership Summit, Mckinsey said that the current demand of 166 mmscmd—made up of nearly 132 mmscmd of supplies from domestic fields and the rest from imported LNG—is likely to rise to at least a minimum of 230 mmscmd and a maximum of 320 mmscmd by 2015.

There was an upside of 280 mmscmd if gas was made available at a delivered price of $10 to $11 per million British thermal unit (mBtu).

"At these levels, the use of natural gas becomes economical, despite switching costs and additional investment required. This demand would be driven by the refining and petrochemical industry (35 mmscmd), the power sector (5 mmscmd) and city gas distribution (about 10-12 mmscmd)," the report said.

There was a total potential of 310-320 mmscmd if gas is used to ease peaking power deficits in India, McKinsey said.

"India's peak power shortages are projected to worsen from a 17% peak deficit in 2009 (a shortfall of 23GW of peak supply) to close to a 25% peak deficit by 2015 and a resultant shortfall of more than 60GW of peak supply," it said.

Even if hydropower was tapped to its full potential, it would still leave a peak shortfall of around 32GW to 40GW by 2015. "Even if half the peak shortfall were met, a gas demand of 30 mmscmd to 40 mmscmd will arise."

"To manage this impending growth, India's natural gas industry will require investments of around $40 billion to $50 billion across the value chain.

"With these investments and demand growth, the industry revenue pool could double to $50 billion by 2015 from $25 billion today. The industry's gross profit pool would be around $30 billion, almost double of today's level," it said.

User

Saint Warren Speaks

Warren Buffett’s latest letter to shareholders has been released and, as usual, it is filled...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Sugar Low

Sugar stocks have corrected sharply on fears of increased supply of the commodity. Time to buy?

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)