India is making a big move to strengthen its energy security and keep its market stable. They’re planning to build a special reserve for gas that can store up to 4 billion cubic meters (BCM) of imported gas. This will help them manage emergencies in supply and make sure the market stays steady.
Recently, Oil Minister Hardeep Singh Puri endorsed the concept of setting up a gas reserve, prompting the Oil Ministry to task Oil and Natural Gas Corp (ONGC), Oil India, and GAIL to collaboratively draft a comprehensive feasibility report. The anticipated report, slated for submission within three months, will delve into the logistics, viability, and economic frameworks of this strategic endeavor.
India has previously explored similar ventures but halted due to prohibitive costs. However, the turbulence in the global gas market last year, rooted in geopolitical factors, disrupting India’s imports and impacting local production, prompted a strategic reassessment, signaling a renewed interest in such a reserve.
The projected 3-4 BCM gas storage, estimated to cost $1-2 billion, aligns with India’s ambitious goal of elevating the gas share in its energy mix from the current 6% to 15% by 2030. Notably, a robust gas storage infrastructure and a comprehensive pipeline network could not only fortify the domestic market but position India as a regional gas hub, potentially supplying neighboring nations like Sri Lanka, Bangladesh, and Myanmar.
The upcoming feasibility report is poised to unveil critical facets, including cost projections, viable locations, construction timelines, and the intricate financial models for these reserves. Leveraging the depleted wells of ONGC and Oil India, identified in Gujarat and the North East respectively, emerges as a pragmatic approach to actualize this gas storage ambition.
Crucially, the report is anticipated to elucidate on the optimal storage model, weighing strategic versus commercial approaches and their financial viability. It’s expected to outline the necessary government support and commercial frameworks essential to transform this endeavor into a financially sustainable venture.
The proposed venture is not merely a short-term solution but aligns with India’s aspiration to evolve into a gas-based economy. With surging gas consumption on the horizon, this strategic reserve becomes pivotal in navigating market fluctuations and reducing dependency on imported gas. This stride mirrors global practices, akin to Europe and China, which have long benefited from substantial artificial gas storage, effectively managing domestic demand and ensuring energy stability.
India’s foray into establishing a strategic natural gas reserve signifies a pivotal leap towards fortifying its energy portfolio, cementing its position as an energy powerhouse poised for sustainable growth.
