KG basin is the North-Sea of India. Humungous discoveries have been made by Reliance, GSPC and ONGC in the KG basin block. With the countdown for the first gas from Reliance field having started ( expected first gas in  second quarter of 2008 ,  initially the output is 40mmscmd which would be ramped upto 80mmscmd in another six months to a year )let us analyze the impact it will have on the Indian Economy and Corporate.

Indian Economy : These discoveries will provide the necessary fuel for the Indian Economy that is running along at a pace of 9% GDP growth. Basically it will transform a pre-dominant liquid fuel economy to gas fuel economy which will havefar-reaching impact on foreign exchange reserve, fiscal defecit and other macro parameters.

Fertilizer Companies would be able to substitute high cost naptha with a relatively cheaper gas thereby positively impacting their bottomlines and government subsidy.

Gas transmission & distribution companies like GAIL, GSPL, Indraprastha Gas, Mahanagar Gas,Gujarat Gas etc would be able to implement their expansion plans with the availability of increased gas. Development of city gas distribution (CGD) projects will improve the efficiency of energy usage and reduce the dependence on LPG, thereby again reducing the Government’s subsidy bill.

Power Companies like NTPC,Reliance Energy, GMR, Tata Power, Lanco etc would be able to improve the capacity utilization of their existing plants and  implement their expansion plans and with the availability of increased gas.

Medium Sized companies and SMEs would be able to convert their existing diesel based power plants to gas based power plant thereby reducing their power cost by atleast 30%.These would also increase the order-book of equipment companies like Cummins India and Wartsila for their gas-engines.

Pipe Companies have already started reaping the benefits and would do-so more in the future as also companies like Everest-Kanto Cylinders.