The global gas prices are momentarily seeing an upward trend primarily influenced by the spiralling crude prices. The rise in global crude prices has been triggered by mounting worries over a supply deficit, following recent output cuts by Saudi Arabia and Russia, which have been extended until the end of this year. However, if compared to last year, gas prices have come down in 2023 and have mostly shown a bearish trend influenced by factors such as weather forecast changes, high European gas inventories (Europe’s gas storage sites are currently operating at over 93% capacity) and weak European demand (thanks to high temperatures across the continent). Compare this vis-a-vis the last year’s situation when global supply chain uncertainties due to the Russia-Ukraine war and export hindrances from the top producer, the US, resulted in unusual price fluctuations in the commodity. Russia used its natural gas exports as an economic weapon against Western European countries, which forged worries over acute fuel shortage, sending prices to record highs in 2022.
In fact, the 2023 bearish trend looks strong enough to overshadow potential bullish factors, such as limited supply from Norway due to outages and the looming threat strikes at Australian LNG facilities endangering the future supplies. Not to forget that the world continues to prioritise cleaner energy sources over gas. That said, the market remains highly volatile. Overall, the scenario remains unpredictable for some years; until the new supply streams become operational, the market remains sensitive to both demand and supply shifts.
On the domestic front, the government increased the price of natural gas to $8.60 per mmBtu for September 2023, from $7.85 in August and further to $9.2/mmBtu in October 2023; the increase came in the backdrop of the rise in global crude oil prices (the domestic gas prices being linked to crude prices). Earlier, the gas prices were reviewed every six months under the New Domestic Natural Gas Pricing Guidelines, 2014, which were based on volume-weighted prices prevailing at four global gas trading hubs. These guidelines have now been rationalised due to the significant time lag and high volatility in gas prices during the last year. On April 8, the Ministry of Petroleum and Natural Gas linked the price of natural gas produced from legacy nomination fields of ONGC, OIL, and the New Exploration Licencing Policy blocks to the Indian crude basket. The price of natural gas from these fields was fixed at 10% of the monthly average of the Indian crude basket.
With government taking all the right initiatives to push natural gas consumption In India, the natural gas sector is set to grow at a fast pace. This growth, we feel, will primarily be driven by the city gas distribution sector. Before the CGD bidding started in 2008, there were just 30 odd authorised GAs covering a mere 3% land area and 9% population of our country. Fast forward to 2023; around 300 GAs have been awarded (out of which 280 GAs are already operational) under multiple rounds of bidding across 650+ districts covering over 98% of population and 88% of land area. With the increasing layout of city gas infrastructure, the number of CNG stations in the country has gone above 5,000 (catering to more than 6 million CNG vehicles). The number of domestic PNG connections has crossed the 1 crore mark with another 50,000+ industrial customers being supplied the piped gas. However, the sector faces a number of unique challenges and we are hopeful that they will be addressed soon. In this issue of GSR, we bring to you a feature story on “City Gas Distribution: The Key to Gas Growth in India”, covering in detail the overall perspective, prospects, constraints and the future outlook on the city gas distribution sector. The views of industry leaders have also been shared.
It is with utmost pleasure we share with you that with consistent and persistent efforts, the membership base of NGS has started growing. During the last quarter (July-September 2023), Pandit Deendayal Energy University (PDEU), Gandhinagar has been enrolled as our Associate Member (Academic Institution) and three other entities – Indradhanush Gas Grid Limited (IGGL), Guwahati, South Asia Gas Enterprise (SAGE) Pvt. Ltd., New Delhi and ABB India Limited, Bengaluru – have enrolled themselves with NGS as the Non-Voting Members. Apart from these, three other professionals have joined NGS as the Individual Life Members (LM), taking the total number of LMs to 9 (one more individual has taken an annual membership).
Shri D V Shastry, Executive Director, NGS participated in the India Gas Infrastructure Conference 2023 (IGIC 2023) held on July 10, 2023 at FICCI, New Delhi. NGS was the Knowledge Partner for the NGV India Summit held on July 20 & 21, 2023, New Delhi wherein ED, NGS chaired a session and also participated as a panelist. On the invitation of AIMA, ED, NGS also attended the 28th Annual Convocation of AIMA held on August 8, 2023 at IHC, New Delhi, in his capacity as the Member of Board of Studies of AIMA. NGS also partnered with ITex Institute for the Pipe-Tech 2023 conference held on August 24 & 25, 2023 at New Delhi and the event was attended by ED, NGS. Further, Shri V C Chittoda, Sr. Consultant, NGS participated in the fourth Panel Meeting on Thermal Mass Flow Meters (virtual mode) and in the Technical Standards Committee: PGD:26:P1 on Thermal Mass Flow Meters at Bureau of Indian Standards (BIS), New Delhi.
The “Future Energy Asia (FEA) Exhibition & Summit 2024” will be held from May 15 to May 17, 2024 in Bangkok, Thailand. This event is hosted by the Kingdom of Thailand’s Ministry of Energy and organised by dmg events. FEA is the region’s leading energy transition forum, providing unparalleled access to government and industry leaders transforming the energy value chain in Asia and worldwide.
In this three-day event, FEA 2024 will convene a Strategic Summit & Technical Conference in which over 250 sessions have been scheduled to be attended by over 500 experts and 2000+ senior decision makers. Further, the exhibition floor will host over 350 companies from more than 70 countries showcasing the energy sector’s vital role in meeting global energy demands and unlocking the potential of a decarbonised future. It is expected that more than 21,000 visitors would be attending the same. This will be of great interest to all CGD companies.
We are happy to share that the organisers of FEA have invited NGS as the ‘Association Partner’ for this event. With persistent efforts, NGS has been able to make organisers of FEA agree to extend various concessions/discounts for NGS member organisations and individual members in terms of the delegate fee. Discount will also be available to the organisational members for putting stall at the FEA exhibition. Those desirous of participation in FEA 2024 and availing the above benefits may get in touch with us at firstname.lastname@example.org for details in this regard.
We sincerely thank our member organisations for their continued support and cooperation because of which NGS is able to continue with the efforts for value addition to its members and the gas transmission and CGD sector. We invite suggestions and guidance and seek support from our members for continual improvement.
With best wishes,
D V Shastry, Executive Director