By: ICN Bureau
Last updated : February 10, 2024 9:33 am
Unaffordable prices will force consumers to switch over to other fuels and it’s imperative to calibrate it carefully so that high prices do not end up destroying demand
India’s achievement of the target of increasing natural gas share in total energy mix to 15% by 2030 from 6% currently is dependent on affordable pricing and synchronisation of infrastructure in the supply chain, Akshay Kumar Singh, MD & CEO, of Petronet LNG said while speaking at the Leadership Panel on “Developing LNG markets and infrastructure” on the second day of the India Energy Week, 2024, in Goa.
The Petronet LNG chief identified pricing as the main impediment in persuading users to switch to cleaner fossil fuel.
“Unaffordable prices will force consumers to switch over to other fuels and it’s imperative to calibrate it carefully so that high prices do not end up destroying demand,” commented Singh.
Singh said that wide adoption of LNG was required for energy transition, and the space for the cleaner fuel’s growth already exists in the economy. He said that LNG can replace a large part of crude, 85% of which is imported, with LNG. India imports around 45% of LNG used in the country.
Singh stressed that while pricing is an area of concern for promoting LNG use widely, the fuel has the advantage that it can be sold in any part of the country. Additionally, LNG can also easily replace 10-20% of diesel used in transportation thus increasing the share of cleaner fuel in India’s energy mix.
Moreover, Singh said that the government’s stated goal is to transition the economy into a gas-based one and that the difficult task of large-scale LNG adoption was possible with the help of government intervention, particularly in adoption of concessional taxation of the fuel.
Speaking at the LNG panel, Sukhmal Jain, Director (marketing) and member of board of directors, BPCL said, "Natural gas adoption was necessary for India to join the league of developed countries. He added that while oil demand growth is projected at 2.5-5% annually, LNG demand growth could be in the 4-5% range.
“Cost, efficiency in supply and taxation have to be aligned for natural gas promotion,” Jain said.
As part of the panel at IEW 2024, Andrew Barry, Chairman, ExxonMobil LNG Market Development and Vice President, Global LNG Marketing, ExxonMobil Oil & Gas Company, emphasised that LNG is a great partner for renewable energy, which faces intermittency issues due to the cyclical nature of solar, wind, and hydro energy.
Agreeing with fellow panelists, Barry identified the cost of building LNG production and transmission infrastructure as one of the main challenges in adoption of clean fuel.