India Needs Integrated LNG Policy

India must devise an integrated policy to take full advantage of the expected big increase in the global supply of LNG, Economic Times said in an editorial piece.

Country’s current capacity of LNG import terminals is about 16.5 mmtpa, while those under construction add up to thrice as much. “And the way ahead is to fast-forward overhaul of power distribution and attendant tariff reform, so that power utilities are able to levy and transparently collect dearer charges for gas-fuelled peak-load power,” the newspaper stated.

With gas pipeline network expected to expand, domestic supplies would get further boost.

Meanwhile, the estimate is that anticipated (mostly unmet) demand for natural gas for 2016-17 is about 350 mmscmd and is projected to go up to 490 mms cmd in 2021-22, with usage for power being by far the single biggest demand.

The newspaper believes that LNG contracts are expected to remain easier in the medium term and well beyond amid subdued international prices.

“It is entirely possible that LNG imports double and even treble over the next decade and it would make strategic sense to better allocate more resources for LNG infrastructure including shipping, so as to reduce the overall costs of energy sourcing and logistics,” Economic Times said.

In tandem, stepping up usage of natural gas, the cleanest fossil fuel, also requires that our power utilities are in a position to adopt promising thermal power-generation technologies like Integrated Gasification Combined Cycle. It would then be possible for even base-load thermal stations to switch to gas to meet peak load.