Oman’s offer to swap Indian coal for its natural gas is an interesting reminder of maturing of the global energy market, and points to how India can, and should, take advantage of this. Policymakers here need to keep two points in mind. First, the proposal shows that there’s recognition of the potential of Indian coal, and second, the imprint that our domestic gas —the Reliance KG basin finds—has left in the market must be factored in while negotiating such a swap deal.
Indian coal may be of relatively poor quality (high ash content) for electricity generation but Oman needs it for alternative end-use—to produce cement for its construction boom. So, there’s good reason to move faster if we can get the cleaner gas for our power and/or fertilizer plants—at a good price.
The benchmark for India must not be the higher rates governing LNG (liquefied natural gas), whether spot or long term. The Reliance gas price has set the trend.