Huge potential for gas and oil sector in the eastern region: Dharmendra Pradhan

Huge potential for gas and oil sector in the eastern region: Dharmendra Pradhan

With industry in the eastern part of the country showing potential in the gas and oil sector, there is an urgent need to step up activities in the region with a particular emphasis on the downstream, the Union Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan said on Sunday.

“With the eastern, north-eastern and the Andaman region endowed with massive reserves of coal-based methane (CBM) and other natural gases, it is high time that we devoted more time and energy to strengthening the support structure – from mentoring, financing, quality standards, marketing inputs and technology acquisition,” the minister said at a CII Conference on Oil and Gas: Exploring Opportunities in the East here.

He also focused on downstream polytex industry, saying this will go a long way in ensuring that India can support textiles industry in south east region, with a special emphasis on Vietnam, and Bangladesh. “The textile sector in the eastern region will grow as a result,” he added.

Pradhan, a big supporter of clean environment and an equitable society, underscored the need for doing away with coal and kerosene and embracing other forms of commercial energy which are of higher quality and efficiency. “This is in view of the adverse effects the traditional energy resources have on the environment and human lives,” the minister said. According to him, more and more people need to be encouraged to take to LPG rather than traditional fuels such as kerosene.

The minister also reiterated the government’s appeal to affluent consumers to give up subsidy on LPG. “Since the time of implementation of Direct Benefit Transfer (DBT), the government has saved Rs 15,000 crore. About 30 million duplicate LPG connections were terminated and had led to this savings,” he said.

He also spoke of the plan to set up an LPG Import Terminal at Paradip in Odisha. “The aim is to help meet the additional LPG demand in the eastern States,” the Minister said adding that LPG pipelines are being built in Haldia and Durgapur in West Bengal, Barauni, Patna and Muzafarpur in Bihar to connect them with the terminal.

“There is an urgent need for launching a sustained campaign across the country for popularizing LPG as a health-improving and environment friendly-fuel,” he said, adding, “With digitisation of LPG distribution, the government has been able to increase LPG penetration.”

“Growth in the Western Region has been largely due to the pipeline from the Western coast to Jagdishpur. An anchor pipeline is being developed from Jagdispur to Haldia,” he said, adding that Indian Oil is building a terminal in Numaligarh and the pipelines from Numaligarh would be connected with Myanmar.

Earlier, the Indian Oil Corporation Limited chairman, B Ashok, explained how and why the oil and gas sector is of strategic importance in India. “To match the projected high growth rate of the economy, with similar increase in energy consumption, India needs uninterrupted, economical, viable and clean fuel supplies,” he said.

Ashok also mentioned the importance of the East in the oil and gas sector. “Around 20 MMT of POL (petroleum, oil and lubricant) are consumed annually in the States of West Bengal, Odisha, Bihar, Jharkhand and Chhattisgarh out of the total consumption of 165 MMT at the national level,” he said.

“This constitutes approximately 13% of the total national consumption while these States contribute to 24% of the national population as per the 2011 census. However, the silver lining is that the consumption in the region has been growing at a faster pace than the national average: CAGR (2008-09 to 2014-15) in eastern India of POL consumption was 5.3% vis-à-vis a national average of 3.6% for the same period,” Ashok said.

Ashok also told the audience that Bihar has the lowest per capita consumption of petroleum products at 39 kg in the region, while Chhattisgarh has the highest with 100 kg. According to him, taxation, infrastructure development, subsidy reforms and land acquisition remain the areas of concern.

RAdm (Retd) A K Verma, chairman, CII Eastern Region, complimented the Union Government for making sincere efforts to revive the sector. “There have been several positive developments in the past ten months,” he said, adding that two milestones are the deregulation of diesel prices in October 2014, and the issue of the Gas Price Notification in November 2014. “A mechanism has been developed to ensure that LPG subsidy reaches the appropriate consumer segments,” he said.

S K Behera, Chairman, MSME sub-committee, CII (Eastern Region), said petrochemical intermediates are a vital link in the chemical industry. “Intermediates like ethylene oxide, propylene oxide, phenol, acrylic acid, styrene and rubber derivatives are the primary elements to produce specialty chemicals. These specialty chemicals in turn, are essential to manufacture a vast majority of consumer and technology products required in the economy,” he added.

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