Oil regulator ropes in ICF for gas demand, infra assessment

PTI, Dec 29, 2019, 12:49 PM IST

New Delhi: Oil and gas regulator PNGRB has hired global consultancy ICF to carry out an assessment of India’s natural gas demand and the infrastructure needed to unleash the country’s massive pent-up requirement, its Chairman Dinesh K Sarraf said.

Natural gas – which has far lower emissions compared to alternative liquid fuels such as petrol and diesel used in automobiles and naphtha and coal burned in factories – makes up for just 6.2 per cent of all forms of energy consumed in the country. This compares to a global average of 24 per cent.

One reason for the low use of the environment-friendly fuel is inadequate domestic gas production and the lack of infrastructure, particularly pipelines to carry the fuel to end-users.

“We have engaged ICF to do a comprehensive assessment of demand and infrastructure needed,” Sarraf said, adding the report is expected by mid-2020.

India is targeting a 15 per cent share of natural gas in the energy basket by 2030. It consumed 166 million standard cubic metres per day of gas during the 2018-19 fiscal year, mostly in western and northern India as east and south were barely connected with the pipeline grid. The consumption does not reflect demand as some demand centres do not have access to gas.

A Petroleum and Natural Gas Regulatory Board (PNGRB) demand assessment in 2012-13 had stated that gas demand will grow significantly at a compounded annual growth rate of 6.8 per cent from 242.6 mmscmd in 2012-13 to 746 mmscmd in 2029-30.

ICF has been asked to study gas demand in different regions as well as the ideal locations for constructing liquefied natural gas (LNG) import terminals, he said, adding the consulting firm would also look at the pipeline network needed to connect the gas source to users.

“We closely studied the Gujarat model where the share of natural gas in the energy basket is the highest in the country at 25-26 per cent. And one remarkable feature we found was that the state administration under its then chief minister Narendra Modi embarked on laying of a massive grid of gas pipeline that crisscrosses the state,” he said.

This network aided increased usage of gas as well as made Gujarat home to the maximum number of LNG import terminals.

“The report of ICF will help in a great deal of planning,” he said. “Once we have a comprehensive assessment of demand and the routes where the pipelines are to be laid, we can invite bids for the construction of such lines.”

The study would also point out the ideal location of the LNG import terminals and user industry can plan projects accordingly.

India currently has six LNG import terminals – Dahej, Hazira and Mundra in Gujarat, Dabhol in Maharashtra, Kochi in Kerala and Ennore in Tamil Nadu.

While the LNG import capacity could more than double to 66 million tonnes by 2020-21, pipeline distribution infrastructure needs to expand to drive offtake.

LNG makes up about half of India’s gas consumption.

LNG terminals are planned through the east and west coastlines to drive gas import and consumption.

The gas demand is largely led by industrial and city-gas distribution consumers.

Sarraf said gas consumption will rise once the city gas distribution networks for sale of CNG to automobiles and piped cooking gas to households expands to 400 districts.

And with limited domestic resources, imports are the only option.

“It would serve the industry if we are aware of the most appropriate locations for setting up an LNG terminal and the pipelines that need to be built,” he said.

Demand growth has faced impediments in the past due to weak domestic supply, poor pipeline infrastructure and a pricing policy that limits corporate investment.

India’s demand is one-fifth of China’s.

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