India plans to have gas strategic reserves

Tuesday, 16 March 2004, 20:30 IST
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NEW DELHI: After rolling out plans for setting up strategic oil reserves, India is studying ways to have strategic gas reserves for 15 days to ensure uninterrupted supply once the market matures five years from now. "With gas expected to play a bigger role in the energy sector, India is working on plans to have a strategic gas reserve," said Petroleum Secretary B.K. Chaturvedi. "We are presently doing in-depth studies as were undertaken for the oil strategic reserves plans. The issues of carrying cost and technology all have to be considered," Chaturvedi told IANS. Chaturvedi and a high-level team had visited France to see its strategic gas reserves. Technical experts from GAIL India Ltd, the state-owned gas infrastructure major, had also visited France, Germany and Belgium. Several other countries, including the US and Canada, have strategic gas reserves. "The study should be completed in two to three months time and we would be seeking cabinet approval," Chaturvedi said. The idea of strategic gas reserves has been floated with India's gas consumption projected to go up from 65 million metric standard cubic metres per day (MMSCMD) to 300 MMSCMD by 2025 according to India's Hydrocarbon Vision 2025. Even the share of gas in the energy basket is expected to go up from eight percent to 20 percent, said Proshanto Banerjee, chairman and managing director of Gail India Ltd. "Now with liquefied natural gas (LNG) coming to Dahej in Gujarat, more LNG is expected to arrive at the Shell terminal at Hazira, the Krishna-Godavari gas and the prospects of gas coming from Myanmar... everything put together, the supply constraint will go. In this scenario it is important to plan for a reserve storage," said Banerjee. "The whole point when you deal with a product that is so vital to so many industries is that you can't afford to have a situation where supply could be disrupted," he added. Strategic storage would be ideal for balancing the highs and lows in demand and supply. So far, with only limited supplies mainly from the Oil and Natural Gas Corporation (ONGC), any shortfall means that industries will have to switch to alternative fuel. However, in the changed scenario when industries are gearing to use environment friendly gas as the main fuel, the government feels that any disruption could spell trouble. India envisages an expenditure of around $100 million for the project, including study of various natural gas storage options like rock or salt caverns, depleted oil and gas fields or aquifers, all of which are available in the country. "There are no major construction costs involved as we would be using existing cavity as in the case of strategic oil reserves. The major cost would be for the study and 15 days' stock of around one billion cubic metres of gas," said Banerjee. GAIL is planning to use the expertise of the Institute of French Petroleum, with which it already has a memorandum of understanding for technical collaboration, and some other global agencies involved in handling gas storage business like Geostock of France. "Prior to finalising a company to handle the responsibility of strategic storage, we would need to carry out a survey of existing facilities in India. The question is to select the most suitable storage and site according to the consumption and demand," said Banerjee. He envisages GAIL taking a lead in the investment required for creating the storage within five years time when the market is fairly mature.
Source: IANS
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