India is planning to invest $60 billion in developing a national natural gas grid and building a number of import terminals, Reuters reports, adding that the plan is part of efforts to reduce emissions.
Petroleum Minister Dharmendra Pradhan said the grid should be completed by 2024.
"I am not talking about potential investment. This number relates to the projects that are under execution," Pradhan said at the India Energy Forum.
Reuters recalls that India's gas demand was growing at a strong pace about 10 years ago, with the 2010 annual rate of increase reaching an impressive 11 percent. Since then, however, growth has slowed, reaching just 2.5 percent in financial 2018-2019. The reason is the same as the reason for China's severe gas shortage a year ago: insufficient grid coverage.
BP's Energy Outlook 2019 forecast that India's carbon dioxide emissions will grow by 116 percent between 2017 and 2040, while primary energy consumption is expected to grow by 156 percent over the same period. Turning to gas is both cheaper than oil and less polluting when it comes to carbon dioxide.
According to BP, gas demand in India will soar by 240 percent by 2040, to 185 billion cu m annually. Most of this will continue to come from abroad as domestic production grows too slowly to satisfy demand.
In the current financial year, domestic gas production averaged a little over 90 million cu m daily, according to the Petroleum Ministry. Consumption, on the other hand, stood at 148 million cu m daily. LNG imports hit 91 million cu m daily in June.
No wonder, then, that India is in the focus of attention of all LNG producers. The development of a national gas grid will only boost the growth of demand and turn the country into an even more important export destination than it is now.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More