Delivering the 75th Independence Day (ID) address on August 15, 2021, Prime Minister, Narendra Modi set the country a target of 2047 – to achieve self-reliance in energy production through a mix of electric mobility, gas-based economy and making the country a hub for hydrogen production. While, electric mobility and hydrogen are futuristic areas, as regards gas-based economy, pursuit of this goal will involve increase in gas consumption to (i) meet additional energy needs for sustaining high growth and (ii) replacing polluting fuels such as coal, fuel oil etc. This could result in further increasing dependence on gas import which is already high at 50%. To prevent this and put India on the path of self-reliance, there is need for a...
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Category: Gas utilization policy
Uniform transport tariff for gas – a flawed idea
Speaking at the launch of the nation’s maiden online gas trading platform by Indian Gas Exchange (IGX), petroleum minister Dharmendra Pradhan alluded to “a new pipeline tariff policy that will replace existing practice of seven different pipeline operators charging separate rates and customers away from gas source paying more than those nearer to source.” Petroleum and Natural Gas Regulatory Board (PNGRB) Chairman DK Saraf was even more specific when he spoke of a “single rate across pipelines so as to make the price of fuel uniform for customers across the country.” According to the minister, “the new policy will help bring down the cost of natural gas, make it affordable in every part of the country and facilitate development of...
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Uniform transport tariff for gas – a flawed idea
Speaking at the launch of nation”s maiden online gas trading platform by Indian Gas Exchange (IGX), union minister for petroleum and natural gas (MPNG), Dharmendra Pradhan reiterated the commitment of Modi –government to raise the share of natural gas in the energy basket from existing around 6% to 15% by 2030 in sync with its avowed objective of promoting use of environment friendly fuel. Pradhan also alluded to ‘a new pipeline tariff policy that will replace existing practice of seven different pipeline operators charging separate rates and customers away from gas source paying more than those nearer to source’. The Chairman, Petroleum and Natural Gas Regulatory Board (PNGRB), Dinesh Kumar Sarraf was more specific when he hinted at ‘single rate...
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Gas price deregulation – what is holding back
The government has initiated discussions to ‘lift price restrictions on domestically produced natural gas’. However, it intends to do it ‘gradually’. It wants to continue with regulated gas pricing for at least three more years. However, during the interregnum, producers will be given freedom to sell a portion of the total output under ‘negotiated pricing deals’ with their customers. Will it help? Under the guidelines in vogue since November 1, 2014, for all of domestic supplies from fields given under new exploration and licensing policy [NELP] as also blocks given on ‘nomination’ to Oil Natural Gas Corporation [ONGC] and Oil India Limited [OIL] under pre-NELP, the price [call it normal price] is a weighted average of prices at 4 international...
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Fuelling new partnerships
India must broaden its vision of oil security which should go beyond increasing indigenous production, to cover arrangements with other nations for assured supplies of crude and gas Despite loud talk by successive Governments about increasing domestic production of oil and gas to make India self-sufficient in energy, we are producing less than 20 per cent of our requirement. The balance, over 80 per cent, continues to be imported. This heightens our vulnerability to a point whereby the slightest disruption in any of the major sources of imports (be it imposition of sanctions by the US against Iran or an attack on oil installations in Saudi Arabia) creates major ripples that have the potential to destabilise the country’s economy. The problem...
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Promote self-sufficiency
The big bang reforms proposed by the Government for the oil and gas sector are laudable but without a stable and predictable policy environment in place, they can’t make much headway The Union Government is considering far-reaching reforms in the gas sector. These include the setting up of a local gas trading platform to facilitate price discovery, stripping the power sector off its priority status by withdrawing priority allocation of natural gas and hiving off the transportation unit of the Gas Authority of India Limited (GAIL), a public sector undertaking (PSU) which currently holds an overwhelming 75 per cent share of the gas transmission network. The stated objective of these reforms is to enable energy firms to invest in exploration and...
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Gas reforms – holistic approach needed
The Union Cabinet is considering far reaching reforms in the gas sector. These include inter alia setting up of a local gas trading platform to facilitate price discovery, stripping power sector off its priority status in the allocation of domestic natural gas and hiving off the transportation unit of the Gas Authority of India Limited [GAIL] – a public sector undertaking [PSU] which currently holds an overwhelming share of the gas pipeline network. The stated objective of these reforms is to enable energy companies to invest in exploration and development of gas fields in India so as to increase indigenous production and ensure that the country achieves self-sufficiency in this major source of clean energy [currently, 50% of our gas...
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Energy security at stake
THE GAS FIASCO In its report submitted in November, 2015, De-Golyer and MacNaughthon (D&M) – a consultant appointed by the Centre following the dispute between the Oil and Natural Gas Corporation (ONGC) and the Reliance Industries Limited (RIL) over alleged migration of gas from former’s oil field discoveries in KG basin to latter’s fields in the same basin off Andhra coast – estimated that 0.4 trillion cubic feet (tcf) of gas had migrated from ONGC’s ‘idle fields’ to RIL. Following this, the government set up a committee under Justice A P Shah in December, 2015 to examine the matter and recommend measures to be taken against RIL for “the unjust benefit” it received from the migration of gas taking in...
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ONGC-GSPC tying knot – good for India’s energy security
There are reports of Oil and Natural Gas Corporation [ONGC] – a central public sector undertaking in the upstream oil & gas sector – picking up a majority stake in gas assets of Gujarat State Petroleum Corporation [GSPC] – an undertaking of Gujarat government – in Krishna-Godavari [KG] basin near coast of Andhra Pradesh. GSPC was awarded the high profile KG-OSN-2001/3 field in the second round of the new exploration and licensing policy [NELP]. Critics are branding this as an attempt by Modi – government at the centre [it was Narendra Modi who as then, chief minister, Gujarat in 2005 had announced discovery in this area with in-place reserves of over 20 trillion cubic ft] to bail out GSPC which...
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Gas pricing – has Modi succumbed to pressure tactics?
On March 10, 2016, the cabinet committee on economic affairs [CCEA] approved a policy to incentivize gas production from deep water, ultra-deep water and high-pressure-high-temperature areas. For such areas, which are yet to commence commercial production as on January 1, 2016 and for all future discoveries in such areas, the producers will be allowed marketing freedom including pricing freedom. This would be subject to a ceiling price based landed price of alternative fuels. The ceiling price will be determined as the lowest of the (i) landed price of imported fuel oil [FO]; (ii) landed price of imported LNG [liquefied natural gas] and (iii) weighted average imported landed price of substitute fuels viz., coal, FO and naphtha with weights of 30%,...
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