Quitol (South Goa): Stressing on the importance of pricing for increasing the adoption of natural gas and its share in India’s energy mix, Akshay Kumar Singh, MD & CEO, of Petronet LNG, said that unaffordable prices will force customers to switch to other fuels and destroy demand. “Unaffordable prices will force consumers to switch over to other fuels and it’s imperative to calibrate it carefully so that high prices do not end up destroying demand,” Singh said.
India achieving the target of increasing natural gas share in the total energy mix from 6 percent at present to 15 percent by 2030 is dependent on affordable pricing and synchronisation of infrastructure in the supply chain, Singh said while speaking at the Leadership Panel on “Developing LNG markets and infrastructure” on the second day of the India Energy Week, 2024, in Goa, on February 7.
Natural gas can replace large parts of crude oil imports: Petronet LNG MD
Singh said that wide adoption of LNG was required for energy transition, and the space for the cleaner fuel’s growth already exists in the economy. He said that LNG can replace a large part of crude, 85 percent of which is imported, with LNG. India imports around 45 percent of the LNG used in the country.
Singh stressed that while pricing is an area of concern for promoting LNG use widely, the fuel has the advantage that it can be sold in any part of the country. Additionally, LNG can also easily replace 10-20 percent of diesel used in transportation, thus increasing the share of cleaner fuel in India’s energy mix.
Moreover, Singh said that the government’s stated goal is to transition the economy into a gas-based one and that the difficult task of large-scale LNG adoption was possible with the help of government intervention, particularly in the adoption of concessional taxation of the fuel.
LNG demand growth to be higher than oil: BPCL Director (Marketing)
Speaking at the same panel, Sukhmal Jain, Director (Marketing) of Bharat Petroleum Corporation Ltd (BPCL), said that natural gas adoption was necessary for India to join the league of developed countries. He added that while oil demand growth is projected at 2.5-5 percent annually, LNG demand growth could be in 4-5 percent range. “Cost, efficiency in supply and taxation have to be aligned for natural gas promotion,” Jain said.
As part of the panel at IEW 2024, Andrew Barry, Chairman, ExxonMobil LNG Market Development and Vice President, Global LNG Marketing, ExxonMobil Oil & Gas Company, emphasised that LNG is a great partner for renewable energy, which faces intermittency issues due to the cyclical nature of solar, wind and hydro energy.
Agreeing with fellow panelists, Barry identified cost of building LNG production and transmission infrastructure as one of the main challenges in the adoption of the clean fuel.