A couple of years ago the then Secretary, Union ministry of petroleum and natural gas, M S Srinivasan painted a rosy picture on gas availability from 2010. He referred to the huge gas reserves prospected in the Krishna - Godavari basin that has the potential of sustaining a production of around100 million cubic metres of gas per day.

Mukesh Ambani's Reliance Industries, engaged in this business, has already been so alert. Sure of copious suppliers, RIL constructed a gas pipeline from Kakinada to its large refineries and petro-chemical plants in Gujarat. This cross-country pipeline was constructed in a short time engaging a large number of Chinese workers. As a partition gift, Reliance Industries also agreed to give large quantites of gas to Anil Ambani’s power plant of Dadri (UP) and NTPC’s power plants in north.

Dr. Bhamy Shenoy, an expert on oil and gas, has raised the question whether such a precious resource as natural gas can be used and allotted at the discretion of a private company. Gas is a scarce resource; shortage of gas has been starving several companies, including those in the public sector, engaged in such vital areas as power, fertilizers and petrochemicals. Gas is a cheap and clean feedstock for several such industries.

The wells are kept idle...

It is indeed a pity that quite a few months after production of gas got ready at RIL’s Krishna-Godavari wells, they should be kept idle for want of clarity on allotment, pricing and end uses. The wrangling over price between the suppliers and users, including Anil Ambani and NTPC, borders on the scandal.

The unplanned and arbitrary nature of utilization of gas appears preposterous. Look at the huge increase in demand for energy, particularly hydrocarbons, over the last three decades when the country had its earlier major strike of gas at the Bombay High in the 1970s.

One is also aghast at the indifference of even several advanced states like Tamil Nadu, to stake a claim for a share in gas production.

West and North consume the entire gas

In the initial years after the 1970s most of the gas produced at Bombay High was almost totally consumed by Maharashtra and Gujarat. In fact these two states built large industries in the petrochemical and fertilizer sectors based on natural gas. They gained a great deal of familiarity with the advantage and elegance of gas as a feedstock for a number of industries.

The alert politicians of UP...

In the 1980s alert ministers from Uttar Pradesh, N D Tiwari and Brahm Dutt, succeeded in staking a claim for this gas for their state. The ambitious 1900 km Hazira-Bijaipur-Jagdishpur (HBJ) pipeline was constructed in just about 19 months involving a cost of Rs.2000 crore. Six large fertilizer plants, each with a capacity of 2250 tonnes of urea per day apart from three large gas turbines and LPG fractionation plants were set up along the pipeline in the states of Gujarat, Rajasthan, Madhya Pradesh and Uttar Pradesh. The capacity of the pipeline was expanded and more gas was transmitted through these to support doubling of capacity of the fertilizer plants as also to supply gas for power and other industries. Delhi could also use natural gas for powering its public transport system; this was a big help in reducing air pollution in and around Delhi that had reached serious proportions.

Gujarat also effectively utilised the increasing quantum of gas available from the onshore wells in the state. Several large capacity fertilizer plants in the state are based on gas. Dozens of other large manufacturing plants are also switching to gas as the energy feedstock source.

Likewise, Mumbai also switched to the more elegant piped supply of gas for domestic consumers.

With such familiarity and supplies triggering more demand, large importation of gas has also been done through ports in Gujarat.

Fertiliser expansion started with south...

In all these spectacular developments, the Southern region has been totally kept out. Earlier, the south had the opportunity to utilize its long coastline that permitted easy importation. In the 1960s and 1970s large capacity fertilizer plants, based on naphtha, were set up at Visakhapatnam (Coromandel Fertilizers), Chennai (Madras Fertilizers), Tuticorin (SPIC), Kochi (Cochin Fertilizers) and Mangalore (Mangalore Chemicals and Fertilizers). With the steep increase in the price of naphtha, production at these units has become unviable. Today except Coromandel Fertilisers, the others are in terminal stages of sickness.

Shifted totally to north...

In the 1970s and the 1980s action shifted to the north with National Fertilizers setting up large capacity fertilizer plants based on fuel oil at Bhatinda, Panipet and Sindhri.

With the feedstock policy shifting to gas in the 1990s, the focus was on plants along the HBJ pipeline. Using the modest quantity of gas produced in the KG basin, Nagarjuna Fertilizers was set up in Andhra Pradesh ; but supplies have been erratic and the plant, started with a lot of promise, has not been faring well consistently.

As early as 1989, IE suggested the southern states be given a modest share of total gas produced from the Bombay High fields, of around 10 million cu m per day. It suggested the four southern states be connected by a gas grid with each allotted around 2 million cu m of gas per day to run fertilizer, power, petrochemical and gas fractionation plants. Sadly, chief ministers of these states did not have much of an idea on the elegance and importance of gas and did not bother to respond to the detailed letters written to them by IE.

IE cautioned the states again on the God-sent bonanza at the KG basin. Surprisingly, even now only Andhra Pradesh has staked a claim for a share of this gas. The fertilizer plants in the south that are sick can be resuscitated by switching to gas as feedstock.

Tamil Nadu planned of developing a large petrochemical complex at Manali, north of Chennai, right from the 1960s when the Chennai Petroleum Corporation was set up. In the late 1980s, the Tamil Nadu government worked on a large industrial park for petrochemicals in Ennore. The Aditya Birla Group appeared interested in setting up a facility for the importation of LNG in huge tankers and use this as a feedstock for a number of industries. Neither of this happened. The state doesn't seem to be familiar with the immense possibilities of natural gas as a feedstock. A couple of years ago Mukesh Ambani met with Tamil Nadu Chief Minister M. Karunanidhi. There appeared the prospect for KG basin gas reaching the state through a pipeline. In the absence of energetic follow up, this project appears a non-starter.

Now the gas divide...

I am afraid the south appears well-set to miss the bus again. After all, once allocation of the available quantum of gas is committed, it will not be possible to divert it and gas is a resource that feeds on itself; that is, the more the familiarity with the consumption of gas, the more will be the demand.

In line with the digital divide and the education divide, the country seems to perpetuate a gas divide as well.

The future prospects for more gas supplies hover around the Iran-Afghanistan-Pakistan-India gas pipeline. But the landfall point for such a pipeline could be in Gujarat or Punjab. Distant south may not get priority in gas flowing through this pipeline too.

How strange the more literate southern states seem so much illiterate in making a legitimate claim even for gas struck in its region!