NATURAL GAS REFORMS

Subject: Economy

Context: Union Cabinet chaired by Prime Minister Narendra Modi approved the natural gas marketing reforms. The reforms aim to fix the gas prices in the market through transparent and competitive processes.

Concept:

E-Bidding Platform: The main objective of the reforms is to provide standard procedure for the sale of Natural Gas in the country. It also aims to provide a transparent and competitive method of discovering market prices through e-bidding.

Permit for the Affiliate Companies to participate in bidding: The reforms permit the associated Gas companies to participate in the building. This in turn will Kindle the competition in the gas market.

Producers will have choice to select a platform

The reforms will give massive push towards gas consumption

The open acreage licensing policy has increased investor driven acreage auction process. Currently, under the reforms, acreages are being allocated only in category 2 and category 3 basins.

Complete marketing and pricing freedom have been provided to domestic gas production companies. This was provided especially to those companies that discovered and developed field plans after February 2019.

Benefits:

The policy will help in bringing uniformity in the bidding process.

It will contribute towards each of doing business.

The reforms will provide a huge boost to the atmanirbhar Bharat Abhiyan as it will encourage domestic investments in the production of natural gas. On the other hand, it will reduce the gas imports.

Pradhan Mantri Urja Ganga

It is a national gas grid project that aims to provide pipe natural gas connection to every household in the Eastern part of the country. This is to be done by developing 15,000 kilometres of piped gas network.

Exploration and Production

the Hydrocarbon Exploration Licensing Policy (2016) was notified in 2016.This was introduced to award hydrocarbon acreages. The open acreage licensing policy that was launched in 2017 augmented HELP.

After these steps, the Government of India approved 129 marginal fields to explore hydrocarbons under discovered small fields policy.

Natural Gas in India

There are 26 sedimentary basins in India. Of these 12% are located in Shallow water, 49 percentage are located on land and 39% are located in the deep-sea water. The basins are divided into three categories as follows

Category 1: these are basins that have reserves and are already producing.

Category 2: these are basins with contingent resources and their commercial production are pending.

Category 3: these basins have prospective resources and are awaiting discovery.