The Economic Times | Robust infrastructure necessary for India to achieve energy security, leaders say

Dec 06,2022

Stakeholders in the oil and gas industry believe that India needs to tap every source of energy in order to continue its growth trajectory. This seemed to be the unanimous opinion of the experts in the domestic oil and gas industry. There also lies the need for a solid infrastructure to support this ambition.

Minister for Petroleum & Natural Gas Hardeep Singh Puri, while addressing the inaugural session of ET EnergyWorld’s Annual Gas Conclave on Monday, outlined that in order to support a gas-based economy, length of India's gas pipeline infrastructure has increased to 22,000 km currently and aim is to Government is taking steps for creation of a free gas market regime and developing the country as a gas trading hub, he added, outlining that the push for a gas-based economy is expected to lead to investment of $60 billion in India in the sector.

“Without energy the economy will not grow, we import 78% of our total oil and gas needs. We need a robust infrastructure to achieve this,” Pankaj Sharma, Additional Director, Ministry of Petroleum and Natural Gas said at the ET EnergyWorld Annual Gas Conclave.

India is on the growth path and to continue its journey all the sources of energy need to be made available.

“India needs to tap every possible energy source to achieve the 7% growth target,” Abhilesh Gupta, MD CEO AG&P Pratham said at the conclave. His views were echoed by Ajay Sambrani, Managing Director, Tubacex Asia Pacific who said, “We need to meet our energy needs from all sources of energy.”

Even though India has sizable shale gas deposits in its kitty, gas will act as a bridge fuel for a net zero economy.

Ashish Agarwal, Managing Director and Chief Executive Officer, Seros Energy Pvt Ltd said that conventional and unconventional sources of energy will be utilized together.He added that the conventional sources of energy will co-exist for at least for the next four decades.

As far as the price of the city gas pipeline is concerned, they are expected to move northwards for some time in the future. “They (prices) won’t tame down in at least two years,” Sambrani said.

This exclusive conference, organized by Pipeline Infrastructure Limited and ETEnergyworld, will bring together experts to answer all these questions and chalk a roadmap ahead.

Earlier the gas pipelines were confined to the western region states, now efforts are being made to strengthen eastern and northeastern states, according to Raman Chadha, Chief Executive Officer, GAIL Gas Ltd.

"For CGD companies two things are required: infrastructure and rational pricing," said Dilip Pattanaik, Executive Director - Natural Gas at Hindustan Petroleum Corporation Ltd.

The city gas distribution network is expanding and is a great opportunity for the companies in that space. “The CGD policy from Rajasthan is very progressive and we are awaiting a good policy from Assam as well,” Suresh Manglani, Chief Executive Officer, Adani Gas said.

The current city gas pipeline infrastructure in the country is 21,000 km and the government plans to increase it to 34,000 km in the next three-five years and most
of the projects are under execution.

We are expanding our CGD network across the country, said S. K. Jha, Executive Director and Head, City Gas Distribution, Indian Oil. For better penetration of CGD, Manglani said, “We should ensure that the consumer gets the best price in CNG and PNG.”

During the discussion on accelerating India’s exploration & production potential and its future the companies said that they were bullish about the growth of the
segment. “We are poised to undertake more exploration in the coming years, said Pankaj Kalra, Chief Executive Officer, Essar Oil and Gas Exploration and Production Ltd. On the challenges that impact the E&P companies, it is the access to capital, said some.

“For smaller independent exploration & production companies, access to capital is a challenge, according to Elango Pandarinathan, Managing Director, Hindustan Oil Exploration Company Ltd The growth path looks bright as Manas Kumar Sharma, Director (Exploration & Development), Oil India said that the company has expanded aggressively, and has seen a seven-fold increase in exploration acreage.

We are in the process of enriching, showcasing the sedimentary data for, exploration to global companies, said C Laxma Reddy, Additional Director General (Exploration), Directorate General of Hydrocarbons.

“We are accessible to operators to get their issues resolved, both domestic as well as global exploration companies,” he added. Despite government intervention, the exploration & production sector is not seeing huge FDI apart from involvement of BP, said Elango Pandarinathan, Managing Director, Hindustan Oil Exploration Company Ltd.

“We are inviting global companies to come and invest in exploration, Reddy said. The panel on critical infrastructure touching upon the capital investment planning
session was a vibrant discussion on the all important subject of the role of robust infrastructure in city gas distribution.

In the years ahead we will see volatility in LNG, gas prices, said Satinder Pal Singh, Chief Executive Officer, Adani Total Private Ltd. There needs to be greater
focus on long-term contracts for gas purchase, Singh said.

“Government needs to provide gas to City Gas Distribution companies at affordable rates so that they are able to make reasonable margins,” said D.K. Sarraf, Former Chairman PNGRB and Former Chairman and Managing Director, ONGC.

We need to have an underground natural gas strategic storage facility to insulate from price volatility, Sarraf said. “We need a lot of investment for good, infrastructure and ripe infrastructure will come up in the near future,” Ashu Shinghal ED Corporate Strategy and Risk Management, GAIL (India) Ltd stated.

“If we rely on long term gas contracts, there won’t be too much volatility. There should be a review clause in long term contracts every three-five years,” highlighted Vinod Kumar Mishra, Director (Finance), Petronet LNG.