India's largest oil producing company, the Oil and Natural Gas Corporation (ONGC), has struck gas hydrate reserves in the deep sea off the Andhra Pradesh coast.
The reserves are located in the Krishna-Godavari basin, which came into the limelight about a decade ago, when Mukesh Ambani's Reliance Industries struck natural gas in the region.
The fresh reserves are estimated to be around 134 trillion cubic feet (tcf), about one-third of the gas reserves of the United States, which is the largest producer of natural gas in the world.
Such a huge quantity of gas can turn India's fortunes in the future, by making the country self-sufficient in the energy sector, which currently imports 80% of its consumption requirements.
First, one needs to understand what is a gas hydrate. It's a solid, ice-like form of water, which contains gas molecules in its molecular cavities.
Large quantities of gas hydrates exist in the world. Scientists in the hydrocarbon field consider this form as the future source of natural gas. However, the catch is, no country in the world has developed technology to extract the gas from these hydrates.
Japan and Canada are two countries that have been working on the technology for a long time, and claim it would be possible to produce commercial gas from gas hydrates in the next 4-5 years.
So, does this mean India's energy security is just five years away? Should Indians be excited by this discovery?
Experts in the sector say no. ONGC's former chairman RS Sharma says: "Ten years ago, we were saying that turning gas hydrate into commercial gas would be possible very soon. We are still saying the same. But the fact is, we don't know when this technology will be developed."
BS Negi, former member of the Petroleum and Natural Gas Regulatory Board, says the Directorate General of Hydrocarbons, the regulatory authority, is not in a position to officially declare the gas hydrate reserves.
"We have known about the gas hydrate reserves for over a decade now. But nothing has been done in that field, because we do not have the technology. The fact that ONGC has found huge gas reserves is of no use until India develops that technology," says Negi.
Another problem with the future of gas hydrates is the cost. Sharma feels the cost of technology for gas hydrates would be too high for it to become commercially viable.
The KG basin is considered India's goldmine for hydrocarbon reserves.
In 2009, when Reliance started production from its gas block in the area (known as KG D6 block), the estimates were considered to be between 9 tcf and 11 tcf. But over the years, the company realised that the gas reserves were much lower, and are now pegged at just 2.9 tcf, a drop of over 67%.
ONGC too holds the rights to 9 tcf of gas reserves in the same region. But till date, it has not produced any gas from the region. It has also revised the estimates down to 1.7 tcf.
ONGC has a poor track record when it comes to converting strikes into commercial production.
In fact, for over four decades, the company survived on its famous oil discovery at Bombay High. And while it announces many oil and gas discoveries every year, hardly any of them come close to commercial production.
ONGC was allocated gas fields in the KG basin way back in 1999. It has made 13 gas strikes in the region till date, but has failed to convert any of them into commercial production. And it's not even due to a lack of technology - there is enough of it in the world to extract gas from the deep sea.
Reliance showed the way, quickly bringing its allocated gas fields to production. In fact, it is alleged that Reliance actually tapped a large amount of gas from the ONGC reservoir in the region, which has put the two companies at loggerheads.
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