LNG as transport fuel is expected to reach 14 million tonnes by 2035 in India: director of GAIL
India’s natural gas consumption is expected to reach 550 million standard cubic meters per day by the end of the decade, up from around 174 mmscmd now, as the user base expands with the inclusion of new industries such as steel, GAIL marketing (India). director ES Ranganathan said Thursday.
Speaking at the ETEnergyworld Gas Conclave virtual event, he said the groundbreaking decision to commit to net zero carbon emissions by 2070 has strongly underscored the reorientation of the Indian economy. towards a cleaner, low-emission economy.
âWe now have a definitive political orientation towards phasing out coal from the primary energy mix with our goals carefully calibrated to take into account India’s energy needs. In this context, gas as well as by-products such as blue hydrogen and ammonia will have a greater role to play in starting the slope from maximum emissions to net zero emissions, ” he said. declared.
While the government aims to increase the share of natural gas in the primary energy basket to 15% by 2030, from 6.2% currently, the share of environmentally friendly fuel in total energy demand does not is only 2%. “The sector will therefore undoubtedly experience strong demand,” he said, adding that the urban gas networks which sell CNG to automobiles and gas supplied to domestic kitchens have seen consumption exceed the levels of ‘before Covid and will experience aggressive growth in the future.
Gas consumption is currently around 174 mmscmd, largely by fertilizer factories, town gas networks and power plants. Of this total, 49 percent is covered by domestic production and the remainder by imports in the form of liquefied natural gas (LNG).
âOn the supply side, we estimate the country will reach around 380 mmscmd by 2029-30, with local production and import of LNG and biogas also contributing significantly,â he said.
LNG, he said, will continue to play a leading role in meeting India’s gas needs despite a strong and welcome recovery in domestic production.
Local production has already jumped from around 19 to 20 mmscmd in the last quarter, he said, adding that LNG import capacity will increase to 40 million tonnes per year.
The demand for gas will be “380 mmscmd on the conservative side and 550 mmscmd on the optimistic side by the end of this decade,” he said. We also believe that the growth of renewable energies will be an opportunity for gas to develop. Gas being the least carbon emitting alternative to this, so wherever there is no renewable energy gas can step in so that we can put in place a low carbon mechanism. 8 years to expand the use of natural gas, including building terminals and laying pipelines, he said, adding that the main demand for gas is expected to come from industries using blast furnaces such as steel , oil refineries, long-haul transportation, and heating and cooling needs. .
Town gas demand is expected to increase to 140 mmscmd in 8 years, compared to 35 mmscmd currently, while gas usage in refineries is expected to reach 58 mmscmd compared to around 14 mmscmd currently.
On pricing, Ranganathan said there is a need to have a long-term âstable and healthyâ LNG price for gas demand to increase.
âWe basically see value in long-term contracts because of the high volatility we are seeing in the spot market (currently),â he said referring to the price of LNG in the spot market. rising from $ 2 per million Britons. thermal units in June at $ 35 now.
Such volatility is “a matter of serious concern to us,” he said, adding that this may have been due to several reasons – expectations of a long winter when heating needs will be greater, supply disruptions in Russia, drought in South America and gas growth. use in power companies as savings rebound from Covid.
This great volatility is not appreciated by anyone. We must seek a long-term, stable and healthy price for the growth of gas, âhe said. India needs to view LNG for transportation the same way it does for electric vehicles, Shell Energy India country chief Nakul Raheja said at the same event.
The introduction of gas under the GST and the reduction in the cost of LNG-fueled trucks may push the use of super-refrigerated fuel in transportation.
LNG as a transportation fuel in India is expected to reach 14 million tonnes by 2035, he said, adding that using LNG in trucks can replace diesel consumption and reduce the country’s dependence. to oil imports.
(With contributions from agencies.)