India sourcing LNG from US, Canada; gas available with PSUs for captive power plants: Govt official

New Delhi: Hours after Iran attacked Qatar’s Ras Laffan industrial city — the world’s largest gas hub — India said the escalation in the West Asia conflict is impacting its energy supplies, but added that it has diversified its LNG sourcing. Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, said on Thursday during an inter-ministerial press briefing, “We’re affected by the supply coming from the Middle East. That’s why this press conference is happening. This impacts us too. If we talk about LPG, almost 90 percent of our imports come from the Middle East. For LNG, about 47 percent of our imports come from Qatar.”

Follow Energy Watch on X

Sharma said that India is managing the situation by sourcing LNG cargoes from alternative suppliers. “We’re handling it (the crisis) by trying to source cargo from other places… We’ve tried to diversify LPG sources as well, and now some of our LPG is also coming from the US. In the case of LNG, Qatar is definitely a major supplier, but there are other suppliers too. For example, the US and Australia are the other big suppliers,” the Petroleum Joint Secretary told the media.

The official also indicated for the first time that gas is available for captive gas-based power plants. “Just yesterday, there was a question about some captive power plants. So, the answer is the same. LNG is available. Those who want it can contact GAIL and the marketing divisions of Indian Oil Corporation,” said the Joint Secretary.

Gas available for captive power plants: Official

The statement hints at improved availability of gas within the country. The government official, however, did not quantify the improvement in the availability or whether it is available for allocation to gas-based power plants that are routinely put to work mandatorily by the Ministry of Power in summer months to meet the power demand surge. On March 9, the government had issued an order for diverting gas from non-priority sectors, like fertilizers, refineries and gas-based power plants, to domestic consumers of Piped Natural Gas (PNG) and Compressed Natural Gas (CNG).

1,25,000 new PNG connections rolled out; 5,600 LPG users switch to PNG

Another indicator that pointed towards better availability of natural gas within the country was the increase in the number of new PNG connections since the West Asia conflict began. Briefing the media, Sharma said that due to the efforts made by the government and the incentives announced by gas marketing companies like GAIL, Indraprastha Gas Limited (IGL), Bharat Petroleum Corporation Limited (BPCL), Indian Oil, Hindustan Petroleum Corporation Limited (HPCL), Mahanagar Gas Limited (MGL) etc, for increasing the penetration of PNG connections, 1,25,000 new domestic, commercial, and industrial connections have been given.

“Because of all these efforts, in the last two weeks, around 1,25,000 new domestic, commercial, and industrial connections have been given. Additionally, in the past three days, more than 5,600 LPG consumers have shifted to domestic PNG connections,” said the official. Before the conflict involving Iran, Israel and the US, India had around 1.5 crore PNG consumers compared to 33.3 crore LPG users. Around 60 lakh households are located within PNG coverage areas and can potentially switch.

LNG supply situation better vis-à-vis LPG

India’s LNG supply remains relatively less affected than LPG due to greater diversification. While nearly 90 percent of LPG imports pass through the Strait, about 60 percent of LNG supplies transit the route, making the disruption less severe for gas. Hence, the government has been requesting LPG users to switch to PNG since the war broke out.

However, despite an improved supply situation, India still faces a crunch, and priority allocation of gas is expected to continue. According to ship-tracking firm Kpler, eight LNG cargoes have arrived in India between March 1 and 10, carrying 0.56 MT of liquefied gas. India typically imports around 2.1 MT of LNG in a month. Also, around 200,000 tonnes of LNG cargoes remain stranded in the strait. The Joint Secretary said that the government will continue to prioritise domestic consumers.

To strengthen monitoring, the government has issued a Gazette Notification, designating Petroleum Planning and Analysis Cell (PPAC) as the nodal agency for collecting, compiling, maintaining, and analysing data from all concerned entities involved in the production, processing, refining, storage, transportation, import, export, marketing, distribution, and consumption of petroleum products and natural gas, Sharma added.

Follow Energy Watch on LinkedIN

15 states to get additional kerosene allocation

On March 12, Minister for Petroleum and Natural Gas Hardeep Singh Puri had said in Parliament that India will be activating alternate fuel sources, like kerosene, fuel oil and coal to meet the needs of the commercial and industrial consumers dependent on LNG and LPG. The Petroleum Joint Secretary informed the media Thursday that around 15 states and union territories have issued orders regarding additional kerosene allocation. She added that the Ministry of Coal has directed Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) to increase coal supplies to states for distribution to small and medium enterprises and other users.

“The Ministry of Environment, Forest and Climate Change has already advised state governments and State Pollution Control Boards to allow the use of kerosene and coal as alternate fuels,” she said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)