Regulation to play a key role in India’s gas ambitions


The US experience suggests building pipelines is not enough. An effective regulatory regime is also required

India’s government has in recent months reaffirmed its commitment to the development of an expanded domestic gas grid and cross-border interconnections such as the long-mooted Turkmenistan-Afghanistan-Pakistan-India pipeline. But the experience of the US gas market suggests that smart and considered government gas transport regulation could play as crucial a role in boosting Indian gas demand as simply increasing pipeline capacity.

To curb its greenhouse gas emissions and reduce air pollution, India plans to increase the proportion of gas in its energy mix from 6.2pc in 2018 to 15pc by 2030. To achieve its target, India has committed to invest $60bn to expand its gas grid and LNG import terminals by 2024, when prime minister Narendra Modi’s current term ends.

Insufficient connections have led to low utilisation of gas in India’s towns and industry. But current pipeline investments aim to build infrastructure connecting all of India’s 28 states.

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Petroleum Economist, 15 October 2020