Minister advocates need to move away from the crude price as the basis for determining the LNG price.
Minister of Petroleum & Natural Gas and Steel Shri Dharmendra Pradhan has said that future of India’s energy sector will be noticeably different from its current avatar, to be driven by new technology and business models. In his inaugural address at the 10th World PetroCoal Congress here today, he said “We are encouraging our oil & gas companies to develop extensive and qualitative engagement with Indian technology and research institutions of excellence. I am happy that seven Indian oil & gas PSUs joined with IIT Bombay last year to set up a Centre of Excellence in oil, gas and energy. Energy transition currently underway can become more manageable only if proactive measures are set in motion. Digital technologies are transforming the energy sector in a profound manner. Industrial Revolution 4.0 is truly at our door step. Indian energy companies will have to quickly adopt and adapt these technologies at a faster pace. We need to create more innovative platforms in India for convergence of leading global technology leaders in the energy sector.
Shri Pradhan stressed on the need to achieve the twin objectives of more energy availability at an affordable price and less carbon through a healthy mix of all commercially-viable energy sources. He said that our target to transform India to a USD 5 trillion economy by 2024, requires a gradual and measured energy transition by deploying all sources of energy.
Shri Pradhan said that the contours of India’s energy transition are also changing fast in sync with global challenges and opportunities. “Winds of change are evident in the global energy arena. Energy sources, energy supply and energy consumption patterns are changing rapidly. In our pursuit to navigate energy transition, it is natural that we will take advantage of unique synergies that exist within the country. Equally, our efforts will be guided by our global commitments be it under UN Sustainable Development Goals (SDGs) of 2030 or those under Paris Climate Summit. ”, he said. The government’s approach to energy policy is based on energy access, energy sustainability, energy affordability, energy efficiency and energy security. All these five enablers will deliver energy justice to our people.
The Minister advocated the need to move away from the crude price as the basis for determining the LNG price. He said “Global gas production and markets have witnessed significant restructuring during the last few years. Global supply of LNG is increasing at a rapid pace, and globally LNG prices are coming down significantly. It is time for our companies to take a relook at the term-contracts with major LNG suppliers. I also believe that the time has come for changing the pricing formulae for purchase of LNG by India. “
Shri Pradhan stressed on building sustainable energy infrastructure that can cater to the energy needs of all our citizens. He said that India is expected to become the largest energy consumer surpassing US and China, in the next decade or so.
Talking about the initiatives in transforming India into a gas-based economy, Shri Pradhan said “I consider that the biggest game changer to bring about greater environmental sustainability and flexibility in India’s energy system is through rapid deployment of natural gas. It would serve as a transition fuel in our country. Our Government is working towards increasing the share of gas from 6.2% to 15% in the energy mix by 2030.” Shri Pradhan also spoke about estimated investment of 60 billion US dollars being lined up in the sector, developing a ‘one Nation one Gas Grid’, cross-country pipelines, rapid expansion of the LNG infrastructure in the country, City Gas Distribution (CGD) network expanding to cover more than 70 % of the country’s population, covering 407 districts spread across 28 States and Union Territories. “We are actively encouraging use of LNG, among others, for long-haul trucking along expressways, industrial corridors and inside mining areas, marine applications. We are also making natural gas easily available at doorsteps for users through mobile dispensing.” he added.
The Minister said “Our Government continues to endeavor to ‘Reform, Perform and Transform’ the sector through proactive and far-reaching policy and market reforms in Exploration and Production, Refinery, Marketing, Natural Gas and Global Co-operation. In the last five years, the acreage under exploration has increased from 90,000 Sq KM in 2014 to 2,27,000 Sq KM in the end of 2019. Our government has carried out 2 D Seismic survey of 48000 line Kilometers in unexplored areas for prospectivity analysis. “
Describing alternative fuels like ethanol and bio-diesel being on high priority in energy mix, he said “We are well on our way to meet the target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030. We are advancing our collaboration with countries such as Brazil and US to improve blending technologies in transport sector.” Oil marketing companies have invested over Rs 32,000 crore to upgrade their refinery processes to produce BS –VI grade fuel. Given the abundance of biomass in the country, the use of Compressed Bio-Gas (CBG) will be promoted in a big way in automotive, industrial and commercial uses in the coming years. SATAT, an important initiative of our government targets to setup 5000 compressed biogas plants mostly by private entrepreneurs who are assured price and offtake guarantee by Oil marketing companies. These plants will not only help tackle the problem of agricultural waste burning but also increase farmers earnings.
Shri Pradhan said that India is now leading the global movement in embracing renewable energy sources. The country has an ambitious plan to increase renewable energy capacity to over 175 GW by 2022 and up to 450 GW subsequently. “I wish to emphasize that India needs all kinds of transportation solutions – cleaner diesel and petrol, CNG, LNG, bio fuels and Electric Vehicles. “, he added. He stressed on the need to create new models of business and governance by leveraging technology. Reposing faith in youngsters, the Minister called upon the industry to create a framework to support young employees on driving innovation and creating new business models. He also stressed on urgent need for the Indian Petroleum and Coal sectors to cut cost and reduce risks by accepting state-of-the-art technologies. “Innovative thinking, development of new tools and technology is the need of the hour. At the same time an active commitment to the environment by way of continuous improvement in energy efficiency is required.”, Shri Pradhan added.