Ind-Aus to form panel on supply of cheap LNG for power plants

India and Australia on Monday decided to form a sub-group, which will include senior officials from the government and industry from both sides, to prepare a roadmap on streamlining issues that would help in providing cheap liquefied natural gas (LNG) for power plants in the Asian country.

"After my discussions with the industry on LNG, some representatives told me that Indian government will have to take concrete steps to help encourage trade relations.

"So, I have now formed a sub-group, which will be under the Working Group on the India-Australia energy dialogue," Power and Coal Minister Piyush Goyal told reporters on the sidelines of the India-Australia Energy Dialogue here.

After the energy dialogues with the US and Japan, working groups were formed that concentrate on issues which need to be resolved at the government level, he added.

This sub-group will have officials from the Ministries of External Affairs and Petroleum and Natural Gas.

Representatives from PSUs such as NTPC, GAIL and Petronet LNG will also be a part of the group. It will also have two representatives from private firms who have gas-based power plants, Goyal, who also has the portfolio of Renewable energy, added.

This sub-group, in about two or two-and-a-half months, will submit a detailed report on what needs to be done and what are the requirements that need to be taken care of so that power plants in can get cheap LNG from Australia, the Minister said.

"From their side, Austrade, the Australian government's trade commission, senior Energy Ministry official, official from the High Commission in India looking after energy and representatives from the private sector will be part of the sub-group," Goyal said.

This group will prepare a roadmap on what steps need to be taken from both the sides so that power producers in India can get access to cheaper LNG from Australia, he added.

Goyal is heading a delegation of senior officials for the India Australia Energy Dialogue.

Industry body CII is leading a delegation to the four-day dialogue, which will witness roundtable meetings between the government of the two countries as well as businesses from both sides on energy related issues.

The move will lead to committed LNG supply to gas-based power plants, which are running below their capacity due to lack of availability of gas.

The grid connected gas-based power generation capacity in the country is around 24,150 MW. Of this, a capacity of 14,305 MW had no supply of domestic gas.

Last year, the government also started a subsidy scheme for gas-strapped power plants.

Under the plan, LNG will be imported and cash-strapped state power distribution companies will be financially supported to buy electricity from them.

Power plants rarely use costly imported LNG as electricity produced from the fuel would cost much more than that from a domestic coal-fuelled plant or a domestic gas-fired plant, and there would be no takers for such expensive power.