Companies & Sectors
LNG imports to surpass domestic production in next two years

In current fiscal, LNG imports will jump to 73 mmscmd and are projected to further rise to 105 mmscmd in 2013-14, equalling the domestic gas production in India

 
New Delhi: India's import of natural gas will surpass domestic production in two years as output from fields like Reliance Industries' Krishna Godavari (KG)-D6 field stagnates, reports PTI.
 
The country's imports of liquefied natural gas (LNG), which costs three times the price of domestic gas, is projected to rise exponentially over the next two-three years, according to latest projections made by the Oil Ministry.
 
Imports of LNG or natural gas - cooled to its liquid form for ease of transporting in ships - at 39.32 million standard cubic meters a day constituted 25.5% of the total consumption of the fuel in India in 2011-12. This share will rise to 41% in current fiscal and to 50% in the next, the ministry's projections showed.
 
In 2012-13, domestic natural gas production is estimated to be around 104 mmscmd, down from 114.90 mmscmd in the previous fiscal primarily because KG-D6 output has slipped to 23 mmscmd from over 30 mmscmd last year.
 
In current fiscal, LNG imports will jump to 73 mmscmd and are projected to further rise to 105 mmscmd in 2013-14, equalling the domestic gas production of that year.
 
In 2014-15, imports at 115 mmscmd will surpass domestic production of 113 mmscmd, the ministry estimates said.
 
For a nation whose current account deficit is already battered by 79% reliance on imports for meeting oil needs, higher share of LNG is not be a good news.
 
Industry officials said the domestic output has stagnated in absence of remunerative prices.
 
UK's BP Plc, which partners RIL in the flagging KG-D6 gas block and other gas discovery areas, recently wrote to Oil Minister M Veerappa Moily saying around five trillion cubic feet of discoveries in KG-D6 and NEC-25 block in Mahanadi basin can be developed on price clarity.
 
The reserves RIL-BP has are more than the remaining resource in state-owned Oil and Natural Gas Corp's fields.
 
Majority of domestic natural gas is priced at $4.2 per million British thermal unit which is one-third the price at which LNG is imported by Petronet LNG Ltd and other firms.
 
The government has been resisting revising the domestic prices fearing its impact on power tariffs and fertiliser cost even as KG-D6 output has plummeted to less than half to 24 mmscmd.
 
Industry officials said that the world over countries have raised price for domestic produce.
 
Last week, Argentina trippled wellhead price for new natural gas production to $7.50 per mmBtu. The South American nation too imported LNG at up to $15 per mmBtu rate, quite similar to the position in India.
 
Neighbouring Pakistan too has announced a new exploration policy giving price of $7 for shallow water finds, $8 for deepsea discoveries and $9 for ultradeep exploration.
 
China too has offered subsidises to energy companies who develop the nation's shale-gas resources.
 

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Clean up the Indian Olympics Association, petitions Ashwini Nachappa

We need sports people to run the Indian Olympic Association instead of politicians, says Ashwini Nachappa in a petition to the sports minister on change.org

 

Ashwini Nachappa (a famous retired athlete) has petitioned sports minister Jitendra Singh on change.org to clean up the Indian Olympics Association, wherein she says, “We are aware of the rampant corruption within the Indian Olympics Association (IOA). We have all seen that despite the evidence against Suresh Kalmadi, Lalit Bhanot and others, the Indian government and the IOA have refused to clean up its act.” She fears that this could potentially kill the Olympic dream of thousands of young athletes who are preparing for the upcoming Olympics.

This petition is consequent to the International Olympic Committee (IOC) suspending the IOA because of government interference, putting a bar on India’s Olympic participation. This is because the IOA failed to conduct the elections in accordance to the IOC’s norms.

Nachappa appeals to the sports minister to ensure that sports people run the IOA. She says, “I believe that in the interest of sports in India, we need sports people to run the IOA instead of politicians. Sports people know what is required and will keep the interest of sports above their personal interests.”

In an appeal to her fans and sports lovers, she adds, “Join me in demanding a clean up of the IOA, and sign the petition on change.org.” The petition has already been supported by 702 people.

Nachappa’s specific demands of the sports minister include derecognising the current IOA, appointing an ad hoc committee of eminent sports personalities and conducting free and fair elections for the association.

She wants all sports lovers to sign her petition to disband the IOA and reconstitute it with people who understand sports and truly want to develop the sporting talent of our nation.

Finally, Nachappa in her appeal to all politicians says, “This is also an appeal to all political parties to not allow their party men run the business of sports, as they are elected representatives who need to work for its people and not cause such huge embarrassment to India’s name. It is time the politicians who know nothing about sports left the management of sports to professionals and sportsmen.”

Nachappa’s petition is addressed to:
Minister of Youth Affairs & Sports (Jitendra Singh)
Secretary, Sports (Pradeep Kumar Deb)
Joint Secretary, Sports (Onkarmal Kedia)
Joint Secretary, Sports (Rahul Bhatnagar)
Minister of Youth Affairs & Sports (Jitendra Singh)
President of India (Pranab Mukherjee)

Clean Sports India has been working towards cleaning up sports in India since the last two years and Nachappa is a part of this movement.

 

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Hindi-Chini Buy-Buy: India needs to become self-reliant to safeguard its industries

We continue to import a lot of rubbish that can be easily made in India and at comparatively competitive prices, employing millions of Indians and using our raw materials

Indians woke up from their deep slumber on the morning of 20 October 1962, when Zhou En Lai, the then premier of China, who had lend his voice to the “Panch Sheel” policy of Jawaharlal Nehru, took the boldest step of attacking India, which was totally unprepared for this military onslaught. Zhou En Lai wanted to teach India a ‘lesson’. And he did!

 

In the three weeks old war, which India lost humiliatingly, because of inadequate equipment and personnel; our borders were truly unguarded. Since India did not belong to any power blocks and military alliances, ‘friendly’ western countries gave lip service while Russia played behind-the-scene and brokered a ceasefire.

 

After this three-week war, it has not been Hindi-Chini bhai-bhai. And it has taken more than a couple of decades, in real sense, to normalize relations, though outwardly.

 

In the meantime, every attempt made by India to become a permanent member of the UN Security Council, has been met with opposition from China, due presumably to their own interests and goaded by their political ally Pakistan which does not want India in that exalted position.

 

The stalemate in this area continues. After all, Hindi-Chini are bhai-bhai, aren’t they?

 

However, with the liberalization of trade, the two-way biz has been slowly improving, with Chinese exports to India exceeding their imports. It took a long time for the Indian industry to put up resistance and ensure inferior quality equipments, particularly for the power industry, coming into the country. The import duty on certain categories was increased to 21% to protect the indigenous manufacturers.

 

Whether the poor quality supplies were as a result of technical incompetence of the supplying factories or intentional to retard the Indian progress would be interesting to debate, but will then get us nowhere.

 

However, in the meantime, due to Chinese policy of permitting foreign direct investment, all over the country thousands of manufacturing units came up, resulting in a gigantic leap forward. Millions of Chinese became gainfully employed and western investors were not aware of the poor wages paid to the workers. Their profits on investments are important and not pontification of virtues.

 

Literally, overnight, China became the principal supplier to the US of thousands of items; it became the leader in the apparel industry with Bangladesh becoming a close second; India, despite its technical advantage of raw materials and trained man/woman power lags behind as the third, even today.

 

In the meanwhile, with the wealth created, China has become, in the last one decade, the holder of trillions of dollars worth of US Treasury bonds. Yuan (also known as the Remenbi) which is not allowed to float freely due to the strict Chinese central bank policy, is inching its way to dislodge the mighty dollar as the world's reserve and strongest currency!

 

Perhaps, the yuan is more dependable than the US dollar!

 

As we turn towards India, the export of iron ore to China took a real beating last year, thanks to our own home-grown corruption and the associated scams on its export. The matter is still under investigation, but export is banned for the time being. Buyers, naturally, are smart enough to tap new sources of supply.

 

In the past, millions of tonnes of iron ore from Karnataka and Goa have been shipped to China to keep their steel mills going, but, because of this Indian ban, and thanks to the slowdown experienced in the steel market world wide, revival of the sector is likely only in the second part of 2013. India needs to take this as a wake up call and do whatever is needed to prevent such stoppage of shipments.

 

Meanwhile, with the kitty bulging with trillions of dollars and to support the indigenous manufacturers of various equipments, China has embarked on an overseas lending spree!

Project financing by China with various Indian companies have reached a substantial amount of $6.602 billion in terms of investments and debts. Lanco group (power projects), Reliance Energy (renewal energy) and Uttam Galva Steel are the major organizations who have sourced their funds from China!

 

It is a wonder why Indian banks were not able to at least match their Chinese counterparts in capturing the Indian business that has gone to China? If such a situation was in any of the western countries, their president or prime minister would have taken it upon himself and led a business delegation to champion their cause and seek directly to influence the country leaders concerned.

 

In India, unfortunately, our leaders are battling more with their own political opponents to hold on to their positions, rather than go all out on a war footing to seek business for the country and ensure employment and productivity on our own soil.

 

As for China, it is still Hindi-Chini bhai-bhai and all that we do and continue to do, is to import a lot of rubbish that can be easily made in India and at comparatively competitive prices, employing millions of Indians and using national raw materials.

 

We need to seriously reconsider our relations with China, strongly on commercial terms so as to flex our muscle on the political arena. Only a stronger commercial approach, in terms of curtailing our imports from China will give them the wake-up call.

 

(More: Articles by AK Ramdas)

 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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COMMENTS

Dr Anantha K Ramdas

4 years ago

Thanks Mr Bharati for your views. Every Chinese product you buy indirectl contributes to industrial growth and employment in China while our fellow Indians are looking for jobs and for using our natural resources.

Likewise, if you want delivery for heavy electrical equipment from BHEL or similar organizations, their delivery commitments are 2/3 years from date; why not all these major power equipment manufacturers expand their Indian production capacities and literally work overtime to meet our own demands?

If you study the Reserves and Paid up capital of a large number of companies, most of them have 20 to 40 times the capital employed; no doubt some of them give good dividends, but their expansion and related activities are solely dependent upon the promoters.

I do not know why will bell the cat, but the Government must direct them to invest and expand in India, rather than making press statements that they are looking for oversea expansion and investments.

Spend in the country first, and if you still have excess and manpower capacity, go overseas!

And stop importing cheap items from anywhere, not necessarily from China, who, in any case, does not support us anywhere, and strongly, and wilfully, supports Pakistan.

Our Policy needs a radical change.

bharati

4 years ago

1. Do NOT buy rubbish and you'll have good savings!

2. India supported China's permanent membership in the UN. Remind the Chinese every time.

China is very clear that every inch of land is important. It is intelligent enough to support Chinese culture, people and language everywhere, unconditionally.

3. Why wait for a leader? All change usually comes from small ordinary folks: buy locally made goods or nothing. Avoid huge supermarkets / malls, buy from small vendors and support your citizens' livelihood.

We are listening!

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