Domestic natural gas output falls 13% in April-September

Domestic natural gas production fell 12.9% year-on-year (y-o-y) to 13,939 million metric standard cubic metre (mmscm) in the first half of the fiscal, as operations become increasingly unviable for energy production companies with government lowering selling prices. Gas output in September was down 11.2% y-o-y to 2,279 mmscm. Indigenous natural gas production caters to about 51% of the country’s requirements, while around 85% of the country’s crude oil is imported.

As noted earlier by Care Ratings, the gross production of domestic natural gas will fall by 10.6% during FY21 as “no company would aggressively want to increase production or get into high-risk projects with such a low gas price”. The current price for gas produced from local fields has been revised to an all-time low of $1.79/mmBtu by the government, which is much below the breakeven point for most fields, the agency noted.