Delivering his address at the occasion of the Confederation of Indian Industry’s National Council meeting, Dr Veerappa Moily, Union Minister for Petroleum and Natural Gas, Government of India, said, “Hydrocarbons will continue to be predominant in India’s energy mix for some time to come.Therefore, we need to put in pace a conducive policy framework to increase investor confidence and facilitate investments in this segment. The government and oil companies are also taking measures to increase domestic production and accelerate the acquisition of hydrocarbon assets overseas.”
He emphasised on the need to diversify into new and unconventional energy sources like coal bed methane and shale gas. He said, “The single most important global development was the discovery of shale gas which is acknowledged as a game changer. In India, we have adopted a two pronged approach with respect to shale gas-overseas acquisition and domestic exploration. Recognising the importance of policy direction, we have also prepared a draft policy for shale gas.”
Highlighting the challenges, in this segment, he said, “The country is currently importing 80 per cent of its crude oil requirements. This may increase to 90 per cent by 2030 and will impact the growth of the country. Reducing the import bill is imperative and will have a huge multiplier impact on the economy”
Reiterating the importance of natural gas,he said, “The whole natural gas value chain including domestic production, LNG imports and pipeline transportation and gas pricing are key focus areas as we take measures to increase the share natural gas in the energy basket from the current 9 per cent towards the global ratio 23 per cent. This will require collective action by the government, industry and consumers.”
Giving an insight into key government initiatives in the gas segment, he said, “By 2016-17, an integrated gas grid will be formed in India spanning 31000 km across the country. LNG terminal capacity is also being increased from 12.5 million metric tonnes per annum (mmtpa) to 45 mmtpa over the next five to six years. We are also working on the 1680 km Tapi gas pipeline project which will enable the gas flow from Turkmenistan. Gas supply aggreement have already been signed. We are working towards reducing import dependency in the hydrocarbon space by 50 per cent by 2017.”
He concluded by urging CII to work with states to set up feeder pipelines connecting to trunk pipelines and reiterated the need for a more transparent regime for expediting the exploration of sedimentary basins in the country.
In the course of his remarks, Mr Adi Godrej, President CII said, “At present, India imports about two thirds of its crude oil requirements and the demand supply gap between oil and gas production and consumption is rapidly widening.He highlighted some key issues including issues related to gas pricing and gas marketing and the lack of decision making process in the upstream sector.”