Govt wants to create an ecosystem where anyone can sell gas: Tarun Kapoor

• 'We are also in the process of setting up a TSO, so that transportation of gas is not monopolised by anyone'
• 'We have set up a committee to look into how natural gas can be made available to the power sector at a reasonably stable price'

New Delhi: The Central government wants to create an ecosystem where anyone can sell gas and buyers have choices, said Petroleum Secretary Tarun Kapoor on Thursday. Addressing the launch of ETEnergyworld.com's annual gas conclave, Kapoor said that the government wants to ensure that gas gets transported without any issues, and for this, a gas exchange has already been set up and added that the government is in the process of setting up a Transmission System Operator (TSO). 

"On the regulations front, we want to create an ecosystem where anyone, producers, marketers or traders, can sell gas, and buyers are able to buy gas from the source they prefer. Gas should get transported without any issue. So, in order to facilitate this easy trading and transportation of gas, a gas exchange has recently been made functional. We are also in the process of setting up a TSO, so that transportation of gas is not monopolised by anyone," said Kapoor.

Gas-based power plants & refineries growth areas for gas economy

Commenting on the future areas of growth for the gas economy, the top bureaucrat said that gas-based power plants, refineries and industries will drive the consumption of natural gas in the country. At present, the share of natural gas in India's energy mix is a little over 6 percent and the government is planning to increase it to 15 percent by 2030. "The growth areas for us for the future are refineries. Refineries have to gradually shift from naphtha to natural gas. The other major growth area is city gas distribution network. As the distribution network grows, the demand for natural gas will go up. Industries are also shifting to natural gas in quite a big way."

While acknowledging that large capacities of gas-based power plants in India are sitting idle, Kapoor said that the government has constituted a committee to look into the issue of making gas available to power plants at affordable and stable prices. "In the power sector, we have about 25,000 MW of gas-based power plants. However, several of these capacities are lying idle because of issues pertaining to pricing of natural gas. So, we have set up a committee to look into this aspect and to see how natural gas can be made available to the power sector at a reasonably stable price," said the Petroleum Secretary.

'11th CGD round will provide access to gas to 86% population'

Talking about the infrastructure required to make gas accessible across the length and breadth of the country, the Petroleum Secretary said that developing gas distribution network has been a major challenge and it will take time to surmount these challenges but added that progress is being made. He said that the 35,000-km-long trunk pipelines are expected to be in place by 2024-25. Regarding the city gas distribution (CGD) network, he said, "The whole country has been divided into geographical areas and PNGRB has been bidding out these geographical areas for setting up gas distribution network and marketing of gas. Currently, the 11th bidding round is on. And after this round is over, under which 208 districts are on offer, we hope that about 86 percent of India's population would be covered. But implementing this would take time."

Domestic production of gas needs to go up: Tarun Kapoor

In 2020, India consumed 50 MTOE of natural gas. India is dependent on imports for meeting around half of its energy requirements. Pointing to the volatility in the global LNG spot markets in recent times, the Petroleum Secretary stressed on the need to increase domestic production of natural gas. "In terms of cubic metres, the total consumption of natural gas in India in a year is a little more than 60,000 million cubic metres, out of which more than 50 percent is imported, and the rest 50 percent is produced within the country. In order to make for the shortfall, domestic production needs to go up."

"With new discoveries being made in the KG Basin, domestic production is expected to go up by 30 MMSCMD. An increase of 18 MMSCMD has already happened. Production from new discoveries made in Assam will also boost the domestic production of natural gas," Kapoor added.

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