India aims to raise the share of gas in the energy basket to 15% from the current share of 6.5% in next three to four years, Oil Minister Dharmendra Pradhan said Thursday.
The focus area for this target will be the country's eastern region, where the Indian government will invest Rupees 500 billion ($7.5 billion) to promote a gas-based economy.
The investment would be focused on developing LNG terminals on the east coast, gas distribution networks in seven cities, putting up 2,500 kilometers of gas pipeline network and feeding fertilizer units in the eastern region.
Pradhan said India has set a target to more than double its LNG imports to 50 million mt from the current 21 million mt to raise the share of gas in the energy basket.
India's share of gas in the energy basket figures poorly compared with the global average of 24%.
"Our aim to promote a gas-based economy is part of the nation's commitment to cut carbon emission levels," Pradhan said at an event to mark an initial agreement between Petrofed and TERI to commission a study to promote a gas-based economy under the patronage of the oil ministry.
Industry officials said India's recent move to cut natural gas prices would also help promote the gas share in the energy basket as cheaper gas would mean lower input costs to compressed natural gas (CNG) and piped natural gas (PNG) to households.
From October 1, India fixed the price of natural gas at $2.5/MMBtu from $3.06/MMBtu previously.
The natural gas price between October 1, 2015, and March 31, 2016, stood at $3.81/MMBtu and $4.66/MMBtu in the previous six-month period.
Indian companies are also exploring the option of setting up a pipeline network to bring LNG supplies from Russia.
India is in talks with eastern neighbour Bangladesh to set up an LNG terminal around Chittagong to bring supplies to its hilly Northeast region.
"All these steps aim to promoting a gas-based national economy in the near future with a focus on the Eastern region," the minister said.
Pradhan said a pilot project to run two buses on CNG would be introduced in southern Kerala state.
"If the pilot project to run public transport clicks, then buses in the southern state would run on CNG like in the national capital," he said.
ETHANOL FOCUS
On Thursday, India reduced the price of ethanol by a fifth for blending with gasoline in an attempt to promote the biofuel.
The new pricing regime for ethanol will be effective from December 1.
The minister said 11 ethanol-producing units would be developed by spending around Rupees 50 billion over the next couple of years in India.
