Along with oil, now the country can design a strategic plan to reserve natural gas and subsequently strengthen its energy security and shield from supply disruptions and frequent price fluctuations coming from perennial political risks in the prime energy-supplying countries the Middle East and Africa.
The store will also support the nation in coping with market spike and price lift in border conflicts and war-like circumstances that worked out lately with China.
The country is making significant savings to satisfy its current imperative oil resources and already experiencing low oil prices in the first semester of FY21 (April-June). Also, the Indian government now senses that it’s high time for comparable support for gas.
Spot LNG rates are currently at around $6 per mmBtu (million British thermal units), slightly higher than the previous year. Still, attractively priced to promote the initiative on decisive reserve.
For making a strategic gas reserve, the intention is to include drained gas areas with fuel or expand storage in substantial salt caverns.
An official study on the strategic gas reserve plan suggests that natural gas consumption would grow two-fold by 2030 and create a great demand and domestic production gap.
It would heighten imports of natural gas and take them near oil imports levels, where the nation has to rely on global supplies to reach over 85 per cent of its indigenous consumption need.
Currently, imported gas fulfils the need for half of the domestic consumption, with the government keeping a keen eye on developing a cleaner gas-based economy, as consumption rises and pushes up LNG imports.
Niti Aayog suggested building a strategic gas reserve, and it is finalising a National Energy Policy. In previous policy draft, the committee made a case for gas storage necessary if users have to be assured of un-interrupted supplies. Official sources suggest that a jury in the Petroleum and Natural Gas Ministry has also considered several approaches for developing the gas reserve and will take actions after obtaining experts' reports. It also intends to engage experts to assess the options.
Accordingly, one can expect a natural gas reserve is depended more on the private sector for developing gas storage capacity. In this regard, National oil Companies (NoCs) will offer oil and gas fields on competing evidence to interested gas marketers, both for strategic and commercial storages. The Oil Ministry may formulate a policy in this regard.
Also, salt caverns and aquifers will investigate to make the necessary gas reserve. After identification of the storage, bids would invite to use the repository. Gas producing companies present worldwide may offer a stake in such storage done in strategic oil reserve.
The selected storage facility is close to the pipeline infrastructure and easy to use fuel in times of need.