EFFECT OF NEW DOMESTIC NATURAL GAS PRICING

FINAL SEMESTER PROJECT SYNOPSIS

GUIDE: Mr.S.K.Pokriyal

SUBMITTED BY:
PRAKASH.K
SAP ID: 500031627
P-MBA Oil and Gas Management
UPES, Dehradun

OBJECTIVE:

To study the impact of domestic gas pricing on the various fronts:

1. To analyze the current domestic market of LNG.
2. Impact of the current pricing for the industry.
3. To study the effect of increase in price on present share of Natural Gas in the industry

The structure of the natural gas industry has changed dramatically since the late-1980s. In the
past ONGC set the gas pricing based on negotiations which resulted in diverse gas price for
different clients. Exploration and production companies explored and drilled for natural gas,
selling their product at the wellhead & transport it through large transportation pipelines.
In January 1995, the Government appointed a committee under the chairmanship of Mr. T.L.
Shankar to review the pricing of natural gas. The present mechanism of gas pricing is largely
based on the recommendations of T. L. Sankar committee and was put into effect from October
1, 1997
60
52.219
50

47.496

48
40.679

40

32.417 32.845

35.407
Column1

30

Column2
20

Natural Gas Production(BCM)

10
0
2007- 2008- 2009- 2010- 2011- 2012- 201308
09
10
11
12
13
14

Later, In April 2014, Rangarajan committee recommendations where implemented at a price of

$8.4 per mmBtu.

Natural Gas Production for the year 2013-14 was 35.407 Billion Cubic Meters (BCM) as
against 40.679 BCM in the previous year viz. 2012-13, showing a decline of about 12.96%.

Industry Take Off(MCM)

10534

1077
2921

4742

Power Generation
Industrial Fuel
Domestic Fuel /Transportation
Fertilizer

11060
1326
1395

Petro -Chemical
Others
LPG shrinkage

METHODOLOGY:
It involves studying the various sectorial-wise utilization of gas, its present & future share and
the effect of present gas pricing in the various industries, comparing it with the prevailing gas
pricing mechanism internationally. Study the various gas allocation policies and its comparison
with existing pricing mechanism. Effect of pricing based on GCV will also be evaluated.

Reference:
1.Petroleum and Natural Gas Regulatory Board- PNGRB pngstat 2013-14
2. Press Information Bureau -Government Of India
3.India oil& Gas - magazine
4. NDTV -profit