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India is relying on KG Basin & LNG imports to build gas-based economy by 2030

For raising the share of natural gas in India’s energy mix to 15% by 2030, the Centre plans to rely primarily on domestic production from KG Basin and imports

For raising the share of natural gas in India’s energy mix to 15% by 2030, the Centre plans to rely primarily on domestic production from KG Basin and imports.
  • Petroleum Secretary Tarun Kapoor has said that the government will make sure that the gas is available through imports and domestic production for facilitating India’s energy transition

  • He also said that the government is working on expanding the capacity of LNG terminals

New Delhi: For realising the plan of raising the share of natural gas in India’s energy mix to 15 percent by 2030 and building a gas-based economy, the Centre plans to rely primarily on domestic natural gas production from KG Basin and imports. Addressing the media at the 4th India Energy Forum CERAWeek, Petroleum Secretary Tarun Kapoor said that the government will make sure that gas is available through imports and domestic production for facilitating India’s energy transition. “The target is to reach 15 percent by 2030. Now, we would like most of it to come from domestic sources. But then it depends on the kind of discoveries we have in the coming few years,” said Kapoor.

Gas-based economy: 3 large discoveries to go into production

While stating that there are three large discoveries that are expected to go on production, the top Petroleum Ministry official said that one of these fields located in the KG Basin is expected to start production next month. “Then production from another field in Rajasthan is going to see a huge ramp-up, starting from the next few months to the next two years. Another ONGC field in KG basin is expected to start production in the next two years. So, this is what we already have on the table. So, domestic production is certainly going to go up and whatever gap is there, that will be met through imports.”

The Secretary said that the government is working on expanding the capacity of LNG terminals and added that the main area of focus for the government is to have a grid in place that covers the entire country and the distribution network.

Will gas be able to compete with cheap renewable energy?

Even though the Centre is keen on making natural gas a vital component in India’s energy mix as the country undergoes energy transition, apprehensions have been expressed about the plan since India currently imports around half of its total gas requirement. On being asked whether the government will continue to rely on imports to push the share of natural gas to 15 percent by 2030 and will imported gas be as price-competitive as renewable energy in both power generation and automobile industry, the Petroleum Secretary said, “Making gas available for the transition is something we will ensure. And then the market has to take over and decide which is a cheaper and better form of energy.”

ALSO READ: India’s natural gas production touches new low in Sep after brief recovery since April

Commenting on the role of gas in the energy transition, vice chairman of IHS Markit and Pulitzer Prize-winning author Daniel Yergin said, “On a global basis, it’s become clear that gas is an essential part of the energy transition. And India’s experience underscores that. In the future, we see gas partnering renewables in the energy transition.”

Statistics show India’s dependence on gas increased in the past 5 yrs

According to data sourced from the Petroleum Planning & Analysis Cell (PPAC), India’s LNG import bill has increased consistently over the past five years. In FY2019-20, 52.81 percent of the total natural gas consumed by India was imported. The figure was at 47.27 percent in FY2018-19, 46.37 percent in 2017-18, 44.61 percent in FY2016-17 and at 40.73 percent in FY2015-16. 

In FY2019-20, India consumed a total of 64,124 MMSCM of natural gas, 60,798 MMSCM in FY2018-19, 59,170 MMSCM in FY2017-18, 55,697 MMSCM in FY2016-17, and 52,517 MMSCM in FY2015-16, the PPAC data showed. 

Alt="India is relying on KG Basin & LNG imports to build gas-based economy by 2030"

In addition to imports, the government is depending on KG Basin for meeting the rise in gas consumption of the country. In a written response submitted in the Lok Sabha on February 4, 2019, Minister for Petroleum and Natural Gas Dharmendra Pradhan had said that crude oil production in the KG Basin is about 19,190 barrels per day and natural gas production is 9.8 Million Metric Standard Cubic Metre per day (MMSCMD). 

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