NEW DELHI: India is considering building emergency stockpiles of natural gas, on the lines of strategic oil reserves, to deal with supply disruption amid the country’s growing dependence on fuel and its import.
The government wants domestic consumption of natural gas, a cleaner fossil fuel, to rise two-and-a-half times by 2030 and is encouraging big public and private investments in gas production, import, transport and distribution infrastructure.
Local demand increased 5.5% between April and October to 35.1 billion cubic meters, increasing dependence on imports to 47% of total consumption from 44% a year earlier. “Today, we consume very little gas but once new import terminals and pipelines are in place and new city gas licensees have rolled out their services across the country, there would be a sharp jump in the consumer base. Any supply disruption can have a huge impact,” said a person, explaining the rationale for building emergency gas storage in the country.
The person is part of a panel formed by the petroleum and natural gas ministry to evaluate the need for strategic gas storage and prepare a plan to go about building and managing these. The panel has representatives from ONGCNSE -0.13 %, GAIL and Oil Industry Development Board.
“We would need to answer two key questions: First, how do we build the storage, and second, what would be the right business model to operate it,” the person said. The panel plans to hire consultants soon and hopes to finalise a report in about six months, he said.
Most heavy gas consuming countries already have natural gas storage in place, primarily for supply security. About 30% of gas storage capacity is in the US, a major producer and consumer of natural gas. Russia, Ukraine, Canada and Germany together account for another 40%. China, a late entrant to the game, too is fast building gas storage facilities.
About three-fourths of underground gas storage is in depleted gas and oil fields while the balance is distributed between salt caverns and aquifers. “The simplest way to start would be to launch a depleted field storage as it would be cheaper and less time-consuming than a salt cavern or rock cavern,” said the person quoted earlier. Salt cavern storage is expensive but allows high injection and withdrawal rates, as well as the ability to cycle working gas several times a year, he said.
The first storage in India could come up at a site connected to a pipeline, the person said, adding that the reserve would store imported gas, which could be released when needed in the domestic market.
Source: economictimes.indiatimes.com