India seeks long term LNG deals as it doubles capacity

India seeks long term LNG deals as it doubles capacity

New Delhi: India is seeking long-term liquified natural gas (LNG) purchase deals with Brunei, Indonesia, Australia and Malaysia as it plans to double its LNG regassificaion capacity by 2016, MoS for petroleum & natural gas R P N Singh said on Wednesday.

India, Asia’s third-largest oil importer, is scouting for long-term overseas deals to help cushion against global price fluctuations and to secure energy supply for a country that relies on imports for four-fifths of its oil needs.

Gas accounts for about 10% of the country’s primary energy basket versus the world average of 24%, Singh said at the East Asia Summit Energy Ministers Meeting in Brunei, adding India’s gas demand is expected to grow at 14% in the next five years.

“To popularise this versatile and environmentally benign fuel, the government is doubling its present regassified LNG capacity of 13.6 million tonnes per annum to 26 million tonnes by 2016," Singh said in a statement.

But industry executives have warned skyrocketing prices of LNG at above $16 per million british thermal units could soon cut into demand growth and delay import infrastructure projects in India, the Philippines and other Asian countries.

Singh said India is also building about 8,000 km of gas pipelines to transport gas across the country.

India currently imports 7.5 million tonnes a year of LNG from Qatar under long-term contracts and buys spot cargoes from across the world.