Minister K.Rosaiah's address at the Conference on
Natural Gas at ITC Kakatiya on 22nd December, 2009
Natural Gas Regulatory Board,
Government of India
> Mr. R S
of Petroleum & Natural Gas,
Government of India
> Mr. Busi
Sam Bob, IAS.,
Principal Secretary, Industries & Commerce Dept.
Atul Chandra, President –
International Operations (E&P), Reliance
> Mr. Y
Harish Chandra Prasad,
Chairman, CII – Andhra Pradesh
Vice Chairman – CII Andhra Pradesh
S.Kannan, Director & Head, CII Andhra Pradesh
colleague and incharge of Major Industries, Mr. Kanna Laxminarayana
> Captains from the Industry
> Colleagues from the Government
> Friends from the Media
> Ladies and Gentlemen
I would like to speak to you with a
categorical assurance from the side of the Government of Andhra Pradesh the pro
and industrial-friendly atmosphere in the State of A.P. will remain unaffected.
There are few problems that have surfaced very recently. I am sure all these
problems will be sorted out by Government of India at the earliest opportunity.
Opportunities in A.P. are plenty for investment. Government of A.P. is fully
committed to go for industrialization of the State in a very big way.
It is my privilege to be present here
and inaugurate this conference on Natural Gas, organized by CII in association
with the Government of Andhra Pradesh. I congratulate CII for having organized
Natural Gas discoveries all over the
world have given phenomenal boost to the economy. It has emerged as the most
preferred fuel due to its inherent environmentally benign nature, greater
efficiency and cost effectiveness and is being termed as the Fuel of the 21st
The natural gas in KG basin is capable
of substituting Naphtha for the production of Urea; power generation; petrol
and diesel for domestic and transport and furnace oil for industrial use.
Out of the total production of around 87
MMSCMD at present, after internal consumption, around 74 MMSCMD is available for
sale to various consumers. 90% of the gas in the country till the year 2008 was
being produced in onshore and offshore of the Western gas fields.
With the recent discovery of KG Basin,
here in Andhra Pradesh, which is one of the largest Gas discoveries in India in
the Eastern Region and also the discovery of crude oil in Barmer Field of Cairns
Energy on Western Region, India has demonstrated that it is rich in hydrocarbon
Considering the high priority of
Government of India to enhance energy security of country and making petroleum
products available to common man at affordable prices, the Government has
adopted multi-pronged strategy.
Stable crude oil prices are the first
requirement for sustained economic development for our country. During the last
15 months, the prices of crude oil in the International Market have been on a
roller coaster ride creating uncertainty. This volatility created problems for
the import dependent economies. The maximum burden of this price increase was
borne by the Government by issuing bonds worth Rs.71,292 Crores and rest was met
by Upstream Oil Companies.
I must bring to your notice that the
Government of India envisages the increase in LPG population coverage from 50%
to almost 75% by 2015. The purpose is to reach LPG in villages, so that
dependence on conventional fuels like wood, coal etc. is reduced. This will not
only help in conservation of forests but will also have positive impact on
environment as well as on the health of our rural womenfolk.
With large investment plans announced by
private players, it is critical that we in the Government continue our efforts
for market development in the sector. I must point out three key areas in this
Firstly, Expansion of infrastructure:
The Government is working towards fulfillment of infrastructure requirements by
continued focus on expansion of gas-transmission pipelines.
Towards this endeavour, Government of
Andhra Pradesh through APIIC, is investing in the equity upto a maximum of 5% of
share in Bhagyanagar Gas Ltd. The Bhagyanagar Gas Ltd. (BGL) has already taken
up the City Gas Distribution in 3 major cities of Hyderabad, Vijayawada and
BGL proposed to provide 2.66 lakh
domestic connections and 50 CNG stations for public transport purpose in next
five years in Hyderabad City.
A total 645 Kms pipeline infrastructure
in the Vijayawada town and around 2.25 lakh domestic connections will be
provided in the next 5 years and approximately 1,000 connections will be
provided by July, 2010 and first online CNG based depot will be commissioned in
It is also proposed to commission first
CNG Station in Kakinada in January 2010 and domestic gas flow is expected to be
commissioned by June 2010.
Investment Corporation of Andhra Pradesh
(INCAP) has been appointed as the Nodal Agency for development of City Gas
Distribution (CGD) in other towns of the State duly taking into account of gas
In order to take maximum advantage of
the Natural Gas potential in the KG basin, Government of Andhra Pradesh is
involved in the Exploitation and Production in the KG Basin through ‘A.P. Gas
Infrastructure Corporation Limited (APGIC)’ with the participation of the APIIC
APGIC, as a consortium member with ONGC,
British Gas (BG India), NTPC, Oil India has participated in NELP – VIII round
bidding for all 5 – blocks (1- Deep Water Block , 4- Shallow Water Blocks ) in
KG basin and won 4- blocks (1- Deep Water Block , 3- Shallow Water Blocks).
Secondly, Facilitating funding
requirements: Our Regulatory policies and incentives ensure ease of investment
and actualization of announced plans across the value chain – from Exploitation
and Production to distribution and utilization.
Thirdly, the Government of India is also
working towards ensuring gas for gas-deprived sectors at reasonable prices,
specifically, to the Power and Fertilizers sectors.
Our former Chief Minister, Late Dr.Y.S
Rajasekhara Reddy has already requested Government of India for revival of Urea
and Ammonia plant of Fertilizer Corporation of India Limited at Ramagundam
keeping in view of availability of natural gas in the KG basin. I, on my
behalf, also appeal to Government of India to revive the plant at the earliest
duly allocating the required natural gas.
Similarly, Indian Farmers Fertiliser
Cooperative Limited (IFFCO), the world’s largest Fertilizer Cooperative has
proposed to set up a grassroot Ammonia-Urea plant of 7.26 lakh tonnes capacity
at Nellore during 1992 and could not be implemented due to non-availability of
I appeal to Government of India to
revive Ramagundam fertiliser plant and also to ensure IFFCO set up 26 lakh MTPA
Ammonia-Urea plant at Nellore duly allocating the natural gas.
I once again emphasize that Government
of Andhra Pradesh is taking all steps to take maximum advantage of the natural
gas potential in the KG basin by way of participating in Exploitation and
Production and promote local industries including power plants, fertilizer
plants and City Gas Distribution.
I wish this conference a great success
and I am sure the deliberations will be of a great use both for the Government
and all other stake holders.