India plans to shift to a gas-based economy

India plans to shift to a gas-based economy

India plans to shift to a gas-agro based economy by boosting domestic production and buying cheap

liquefied natural gas (LNG) as the world’s third-biggest oil importer seeks to curb its greenhouse


New Delhi has promised to shave a third off its emissions rate by 2030, partly by boosting the use of

cleaner burning fuels. Gradually we are shifting towards a sustainable gas economy said oil minister

Dharmendra Pradhan recently.

Gas accounts for about 8 percent of India’s energy mix, while oil accounts for more than a quarter.

India’s gas supply deficit is expected to widen from 78 million cubic metres a day (mscmd) this fiscal year

to 117 mscmd in 2021-22, according to a government estimate.

India recently negotiated better terms for a long-term LNG deal with Qatar and importer Petronet

LNG is in talks with Exxon to renegotiate pricing for gas from Australia’s Gorgon project. The price

should be affordable to us. We respect long-term contracts but everybody has to appreciate the

changing scenario, said Pradhan. In a bigger canvas India has the potential of a huge market, he said.

Pradhan last month visited Saudi Arabia, the United Arab Emirates and Iran to deepen ties with its main

oil suppliers.

We want to move beyond a buyer-seller relationship he said, adding that India was offering them stakes

in its pipelines, petrochemical complexes and refineries. India is also in talks with Abu Dhabi National Oil

Co and Saudi Aramco to lease strategic oil storage.

Prime Minister Narendra Modi’s visit to Iran later this month is expected to deliver concrete results. Iran

has set aside its Farzad B gas field for development by Indian firms, a move that could result in the

building of an LNG plant as India consumes or markets its production share.

Over two years Asian LNG prices have slumped by three quarters to $4.65 per million British thermal

units (mmBtu). Pradhan expects hefty LNG investments worldwide to ensure affordable long-term

prices, a trend that will suit India as a consuming country. India is building import terminals on its

eastern and western coasts and pipelines to boost industrial use of gas. In the fiscal year to March,

India’s gas production declined by about 4.2 percent, while imports rose around 15 percent.

India recently offered better gas pricing to boost domestic output, but its most recent investment in an

LNG terminal in Kerala has been underutilised since it lacks pipelines to connect to demand centres after

farmer opposition caused land acquisition problems. Pradhan said the government was talking to the

states and hoped obstacles to a pipeline connecting Kochi to Mangalore would be resolved after state

elections in Kerala.

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