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India’s Y-o-Y Natural Gas Production Tumbles to Record Lows in April-August

  • 23-Sep-2020 11:00 AM
  • Journalist: Francis Stokes

India's natural gas output fell cumulatively by 13.2% during April-August period compared to a 1% fall registered in the same period last year. As virus stoked up lockdown fears, domestic natural gas consumption slumped almost by 9.5% year-on-year during the period between April-August. Sudden drop in production has been on account of limited buying by the consumers due to the coronavirus led lockdowns. While production from the onshore fields was recorded around 34%, coal-bed methane (CBM) fields contributed around 2% to India’s total Natural Gas production during the period under consideration. Industry experts reported resilient demand for Urea production and piped natural gas (PNG) which was offset by dampened demand for power generation, CNG re-fueling stations and reduced refinery throughput rates. Apart from being an important fuel, Natural Gas demand in India is strongly driven by industries such as fertilizer (28%), power (23%), city gas distribution (16%), refinery (12%) and petrochemicals (8%). It is being estimated that battered by the grim energy market outlook, the domestic Natural Gas price is expected to remain pressured in 2HFY20, causing producers to maintain curtailed output. Thanks to the government’s strong push towards ramping up domestic Urea production and its vision of becoming self-sufficient in the production of fertilizers by 2023, Natural Gas market fundamentals seem to improvise in the long run.

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