BusinessLine: India will become a large gas market over time, says Shell LNG head

The energy and petrochemicals major Shell is upbeat on opportunities in India in meeting LNG requirements and developing support infrastructure such as the Hazira terminal. The multinational has been recently asked to be part of an LNG terminal project in Kakinada in Andhra Pradesh. It is awaiting full diesel de-regulation to expand its retail presence. Roger Bounds, Global Head of Shell LNG, in an interaction with BusinessLine, outlines Shell’s perspective on the market opportunity and the way forward.

In the context of the current global prices, what are the opportunities Shell sees in India?

We think India will become a large gas market over time. It will be larger than what can possibly be met from domestic production. There will be an increase in gas imports. The most flexible form of gas import is LNG. It is a good fit between both the LNG we provide and also the environment benefits gas provides in enhancing the quality of life.

Given the fact that the gas prices in domestic and international markets vary, do you see that as a hurdle in the growth of LNG sector?

It’s always a challenge when the price of natural gas in the world market place is determined by market forces while domestic prices are sought to be set by variety of regulatory mechanisms. It is not unique to India.

We have, however, seen it being successfully addressed in a number of different countries and we are optimistic that it will be addressed in India as well. We are closely following the Government’s efforts to introduce more market-based pricing for gas in India. MORE