It has been agreed to establish the gas trading hub(s)/exchange(s) in the country wherein the natural gas can be freely traded and supplied through a market mechanism. In view of the administrative, legal, operational issues involved, a precise timeframe for operationalizing the gas trading exchange/hub cannot be indicated at this stage.
As per draft National Energy Policy of NITI Aayog, the US $ 150 billion capital investment is needed in the energy sector on an annual basis until 2040.
Development of Natural Gas Grid:
- To develop the natural gas grid, Government has taken a decision to provide a capital grant of Rs. 5176 crore (i.e. 40% of the estimated capital cost of Rs. 12,940 Crore) to GAIL for development of a 2655 Km long Jaddishpur-Haldia/Bokaro-Dhamra Gas Pipeline (JHBDPL) project.
- This pipeline will transport Natural Gas to the industrial, commercial, domestic and transport sectors in the States of Bihar, Jharkhand, Odisha, West Bengal, and Uttar Pradesh.
An Integrated Refinery-cum-Petrochemical Complex:
- Oil Public Sector Undertakings (PSUs) namely Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have decided to set up an integrated refinery-cum-petrochemical complex with a refining capacity of 60 MMTPA (Million Metric Tonnes Per Annum) at Babulwadi, Taluka Rajapur in Ratnagiri District in the state of Maharashtra.
- The establishment of a hub is an attempt to meet operators’ demands for the adoption of a market-based gas-pricing regime. But India faces challenges in making the dream a reality, amid concerns over third-party access and competition.
- The gas hub plan ties in with Prime Minister Narendra Modi’s efforts to boost the share of natural gas in India’s energy mix to 15% by 2030, from just over 6% now.
- Domestic supply is also increasing. ONGC, India’s largest producer, supplied 23.5bn cubic meters of gas in the 2017-18 financial year and plans to almost double this within the next four years.
- The Indian authorities are considering overhauling the policy of fixed domestic gas prices, currently based on a formula derived from prices in the US, Canada, UK, and Russia. Delhi sees itself as a potential candidate for Asia’s largest LNG trading hub, in a region that lacks accurate benchmarks reflecting Asian gas fundamentals.