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India emerging as global demand centre provides arbitrage scope in natural gas buying, says Jain

Union Petroleum minister Hardeep Singh Puri with Pankaj Jain, Secretary, Ministry of Petroleum & Natural Gas

India’s emergence as the demand centre for energy in the world provides arbitrage opportunities around the globe for procuring natural gas, said Pankaj Jain, Secretary, Ministry of Petroleum & Natural Gas.

He was speaking at the India Energy Week (IEW) 2024 in Goa.

Mr. Jain said that with huge buying power India can execute natural gas procurement deals much below the market rate and the government would encourage such sellers to engage in negotiations.

Towards energy transition, natural gas will see wider adoption in India due to infrastructure upgradation in terms of terminal capacity and pipeline network, Mr. Jain said adding that diversification of fuel sources both domestically and globally was key to making the cleaner natural gas available to consumers. 

Referring to sectors that can enhance the current level of natural gas usage in the country, he said that scaling of gas-based mobility and expansion of piped gas connections to homes would also be demand drivers for natural gas.

The secretary said that expediting and expanding adoption of biofuels was incumbent on scaling up production of the fuel at an affordable cost.

He pointed out that recent progress in two key areas of biofuel production—feedstock collection and processing facilities—bodes well for the future.

“Some years ago it was unimaginable that municipal solid waste could be segregated. But it’s happing now,” Mr. Jain said. He added that the government was working on mechanisation, infrastructure support and improving local networks to improve aggregation of feedstock.

He also mentioned about the pioneering role played by small and medium enterprises in enhancing biofuel production in India.

On Friday the India Energy Week 2024 came to an end and Union Petroleum minister Hardeep Singh Puri announced the next edition to be held in Delhi and in 2026 the event will be back in Goa. 

Speaking at the concluding event, Mr. Puri highlighted that while India would account for 25% of incremental global oil demand over the next two decades, the growth would not be restricted to just exploration and production activities but also extend to biofuels.

“We could not get more than 1.5% biofuel blending up to 2014. Today we have got 12% blending in the entire country, and we are now going to take it to 20%. So I think that the best is yet to come,” he said.

He emphasised that ethanol, biofuels, compressed biogas and green hydrogen would see immense growth in India.

“I think the world is just beginning to see that green hydrogen may not be as distant a story as was initially thought. And at least the Indian estimates of 5 million metric tons per annum by 2030 is very much an underestimation,” he added

(This writer was in Goa at the invitation of the Federation of Indian Petroleum Industry.)

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