Government working to make LNG cheaper fuel option : Moily

The government is working to make liquefied natural gas (LNG) a comparably cheaper fuel option and achieve energy security by 2030.

"Making LNG a cheaper fuel option is a great task," Petroleum Minister M. Veerappa Moily said at the third IEF NOC-IOC forum currently underway here.

The major challenge faced by the government in this task was to arrive at a compromise pricing between what the Indian consumer has been used to and the much higher landed price of LNG imports.

"The challenge before us is that landed cost is expected to remain high in the lower range of $10-$12 per million British thermal units, not in the range of $4-$5 mbtu which customers are used to," Moily said.

With rising domestic demand for gas, India has now become the 5th largest importer of LNG after Japan, South Korea, Britain, and Spain and accounts for 5.5 percent of world trade.

Moily said India already has secured supply deal of around 14 million metric tonnes per annum and deals for around 20 mmtpa are in the pipeline.

Observing that liquefied natural gas (LNG) pricing is fast turning an issue, Moily told the gathering of national and international oil companies that importers now desire to move away from oil-linked gas prices to the international Henry hub gas pricing because of the current high oil price band.

The C. Rangarajan Committee, appointed by the prime minister to also look into revision of gas prices, has recently submitted its report.

"The Rangarajan Committee report is under active consideration and the actions for implementation of Rangarajan Committee recommendations have been initiated, " Moily said.