The existing 25,000 kilometre long National Gas Pipeline (NGPL) network in the country is operating at an estimated 50 per cent of capacity utilisation, causing losses to entities operating in the pipeline infrastructure segment, said A Ramana Kumar, member, Petroleum and Natural Gas Regulatory Board (PNGRB), while participating in the 2nd National Conclave on Natural Gas and Petroleum Products Infrastructure held in Gujarat.

“As of today, we have around 25,000 kilometres of natural gas pipeline. Another 10,000 kilometres is coming in the next 2-3 years. One of the major concerns of the pipeline entities is that the capacity utilisation of this pipeline is roughly around 50 per cent,” Kumar, said while participating in a panel discussion on the topic of “Building India’s Next Gen Gas Grids: Infrastructure, Innovation and Investment for a sustainable future” at the conclave at Gandhinagar, Wednesday.

“There are a couple of pipelines where the capacity utilisation is less than 10 per cent. We should ponder why this situation has happened,” he said, adding that in the event of pipeline infrastructure not being optimally used, the “pipeline entities are incurring huge losses.”

“Any pipelines planned in future should go through some kind of judicial analysis about the demand, including anchor demand. We should look at increasing the capacity utilisation of existing pipelines,” Kumar added. According to PNGRB, a total of 35,000 kilometres of NGPL network has been authorised of which 25,000 kilometres — with a carrying capacity of 400 mmscmd of natural gas — is functional.

Kumar said that the existing pipelines and the proposed 10,000 kilometres of pipelines will cover almost 95 per cent of the Geographical Areas that have City Gas Distribution Networks. The CGD sector with 307 authorised Geographical Areas is expected to be the primary growth driver for natural gas consumption in India.

Decline of natural gas in power sector

The projections shared by PNGRB at the conclave show that the natural gas consumption increased from 131 mmscmd to 188 mmscmd in financial year 2024, which is a CAGR of just 4.6 per cent. The consumption of natural gas used in the power sector — biggest consumer of the fuel — declined from 29.8 mmscmd in 2015-16 to 24.81 mmscmd in 2023-24. 

Currently, the installed gas-based power capacity in India is about 23.8 GW with a plant load factor (PLF) of only 14.8 per cent in financial year 2023-24. PNGRB figures show that 31 plants with 14.3 GW capacity are stranded. “When the KG basin discovery took place in 2002, a lot of gas was expected to come. A lot of (gas-based) power plants came up, especially on the Andhra coast. Those plants stand stranded,” PNGRB chairman Anil Kumar Jain had said during an interaction with mediapersons on Wednesday.

“The Indian power market is so sensitive. The coal-based power is cheap and so wherever PPAs allow the plants function. In other places, a fixed cost is paid and the plants remain closed. There are some months and seasons when the power demand increases and power supply cannot be fulfilled through the PPAs. At such times, gas-based power is produced,” Jain added.