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.
“We now have a definitive political orientation towards phasing out coal from the primary energy mix with our targets 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 play a greater role in starting the slope from maximum emissions to net zero emissions, ”he said.
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 urban gas networks which sell CNG to automobiles and gas piped to household kitchens have seen consumption exceed levels. 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).
“On 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,” 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 renewables will be an opportunity for gas to grow. Gas being the least carbon-emitting alternative to this, so wherever renewables do not exist, gas can intervene so that we can have a low carbon mechanism in place. ”
India needs Rs 1.6 lakh crore of investment over the next 5-8 years to expand the use of natural gas, including construction of terminals and laying of 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 “stable and healthy” LNG price for gas demand to increase.
“We basically see value in long-term contracts because of the high volatility we are seeing (currently) in the spot market,” he said referring to the price of LNG in the spot market. rising from USD 2 per million British 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 multiple reasons – expectations of a long winter where heating needs will be greater, supply disruptions in Russia, drought in South America and growth in gas consumption by power companies as economies 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,” he said.
India needs to consider 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.