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
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.