Can Gas Account for 15% of India’s Energy Mix?

In March this year, union minister Dharmendra Pradhan published an article. Most of the piece, titled Why India Needs A New Energy Roadmap, listed the Bharatiya Janata Party-led National Democratic Alliance (NDA) government’s efforts to make India a gas-based economy.

The government, wrote India’s petroleum and natural gas minister, wants to take India towards renewables. The country, however, is at a stage in its “developmental cycle” where it cannot exit fossil fuels entirely. And so, he wrote, the NDA is trying to “use least-polluting fossil fuels to complement the shift to renewables”.

This fossil fuel is gas. Under Prime Minister Narendra Modi, Pradhan wrote, the NDA is “taking policy initiatives, revamping policies and building next generation infrastructure” to make India a gas-based economy. The first stage in this transition would increase the share of gas in India’s energy mix from the current 6.5% to 15% by 2030.

Accordingly, he wrote, India has linked domestic gas prices to global gas benchmarks, added LNG terminals, accelerated work on pipeline grids, auctioned out more city gas distribution (CGD) licences – at last count, these spanned over 400 of India’s 739 districts and about 70% of the population. More recently, the NDA has announced it will set up a gas exchange and rationalise pipeline tariff.

India’s pink papers carry reports of yet more developments. Petronet LNG, owned by public sector oil companies, is back in talks with USA’s Tellurian to pick up equity – which will entitle it to long-term gas supply. GAIL (Gas Authority Of India) is now buying gas from Gazprom. Old supply contracts – like the one with Qatar – continue.

Private companies are forging alliances as well. Real estate major Hiranandani is getting gas from Russia’s Novatek. Even Total has invested in Adani.

Is this boom for real? Will Gas account for 15 percent of India’s energy mix by 2030? The answer in part two.

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