Strategic Analysis: Click For Updates

This article was downloaded by: [Northeastern University]
On: 29 December 2014, At: 23:04

Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered
office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
Strategic Analysis
Publication details, including instructions for authors and
subscription information:
http://www.tandfonline.com/loi/rsan20
India’s Natural Gas Infrastructure:

Reassessing Challenges and
Opportunities
Manish Vaid
Published online: 28 Jul 2014.
Click for updates
To cite this article: Manish Vaid (2014) India’s Natural Gas Infrastructure: Reassessing Challenges
and Opportunities, Strategic Analysis, 38:4, 508-527, DOI: 10.1080/09700161.2014.918428
To link to this article: http://dx.doi.org/10.1080/09700161.2014.918428
PLEASE SCROLL DOWN FOR ARTICLE
Taylor & Francis makes every effort to ensure the accuracy of all the information (the
“Content”) contained in the publications on our platform. However, Taylor & Francis,
our agents, and our licensors make no representations or warranties whatsoever as to
the accuracy, completeness, or suitability for any purpose of the Content. Any opinions
and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content
should not be relied upon and should be independently verified with primary sources
of information. Taylor and Francis shall not be liable for any losses, actions, claims,
proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or
howsoever caused arising directly or indirectly in connection with, in relation to or arising
out of the use of the Content.
This article may be used for research, teaching, and private study purposes. Any
substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &
Conditions of access and use can be found at http://www.tandfonline.com/page/terms-
and-conditions
Downloaded by [Northeastern University] at 23:05 29 December 2014
Strategic Analysis, 2014
Vol. 38, No. 4, 508–527, http://dx.doi.org/10.1080/09700161.2014.918428
India’s Natural Gas Infrastructure: Reassessing Challenges and

Opportunities
Manish Vaid
Abstract: This article describes India’s energy situation in the midst of current
economic and geopolitical challenges while highlighting some of the key issues
pertaining to India’s natural gas infrastructure. The infrastructure dealt with in this
article includes natural gas grids (networks of natural gas pipelines) and Liquefied
Natural Gas (LNG) terminals which are planned to be expanded further, as well as
transnational gas pipelines from and through countries like Iran, Turkmenistan,
Myanmar, Pakistan, Afghanistan and Bangladesh, which have been pursued by the
Indian government for a long time. Other infrastructure such as city gas distribution,
consisting of Piped Natural Gas (PNG) for domestic and commercial use and
Compressed Natural Gas (CNG) for use in automobile industries, remains outside
the scope of this article. The article further highlights how such an energy situation
coupled with poor natural gas infrastructure has deepened India’s energy crisis,
characterised by poor performance of the power sector, particularly those run on
natural gas. It gives some recommendations for improving such infrastructure and
better gas diplomacy for its transnational gas pipelines which could lead to better and
faster distribution of natural gas across the country. The article also highlights the
preferred course of action for the government, besides offering policy prescriptions in
due course.
Introduction
midst rising energy demands, India continues to face challenges in regard to its
A energy security. According to BP Energy Outlook 2035, India is likely to surpass
China as the largest source of energy demand growth by 2035.1 Its energy scenario is
characterised by increased energy demand, mostly derived from imported conven-
tional energy sources like crude oil and natural gas due to insufficient indigenous
production of hydrocarbons and coal to improve the overall calorific value of thermal
power plants.2 These factors coupled with poor natural gas infrastructure have
resulted in imbalanced distribution of energy in the country.
In its projections on India’s natural gas, Hydrocarbon Vision 2025 expects an
increase of its share of natural gas from 10 per cent in 2010 to 20 per cent in 2025,
while the Petroleum and Natural Gas Regulatory Board’s (PNGRB) ‘Vision 2030’:
Natural Gas Infrastructure in India3 predicts the realistic demand for natural gas will
grow significantly at a Compound Annual Growth Rate (CAGR) of 6.8 per cent from
242.6 Million Metric Standard Cubic Metres per Day (MMSCMD) in 2012–13 to 746
MMSCMD in 2029–30. Both these projections necessitate that the government
expands its natural gas infrastructural network to a level commensurate with its
natural gas demand on a sustainable basis.
Manish Vaid is a Junior Fellow with the Observer Research Foundation (ORF), New Delhi.
© 2014 Institute for Defence Studies and Analyses

Strategic Analysis 509
Ensuring continuous availability of commercial energy at a price affordable to

citizens is becoming a daunting task for energy producers and policy makers.
Therefore, diversifying and steadily replacing crude imports with natural gas, pre-
ferably through long-term contracts, provides a viable option for fulfilling existing
energy needs. The idea of switching to natural gas from fuels like oil and coal is to
curb energy emissions and improve economic growth while keeping energy efficiency
at the core of the business. Easy replacement of petrol and diesel with Compressed
Natural Gas (CNG) in the transport sector and of domestic Liquefied Petroleum Gas
(LPG) with Piped Natural Gas (PNG) in the domestic sector also makes natural gas a
preferred fuel, creating a spontaneous demand for it.
CNG, for instance, is considered the preferred fuel as it is low in pollutants, high
in calorific value and heat yield and relatively economical. It is a perfect substitute for
petroleum products like petrol and diesel. Compared to petrol, CNG reduces emis-
sions resulting from carbon monoxide, hydrocarbon and carbon dioxide by 90 per
cent, 60 per cent and 10 per cent respectively.4 Furthermore, natural gas being 80 per
cent cheaper than oil on an energy-equivalent basis5 can help in saving significant
foreign reserves for India. India’s National Action Plan for Climate Change (NAPCC)
also suggests switching to cleaner energy6 with the use of natural gas.
Increased domestic natural gas production and LNG imports can therefore help
sectors such as power, transport, household and so on to replace their existing fuels
(coal, petrol, diesel, etc.) with natural gas, thereby meeting existing as well as
potential demands. This calls for good natural gas infrastructure constituting
Regassified Liquefied Natural Gas (RLNG) terminals, transnational natural gas pipe-
lines and cross-country gas pipelines, making gas available across the length and
breadth of the country.
However, the increasing deficit in the availability of natural gas prompted the
government to prioritise gas allocation to different sectors through its Gas Utilisation
Policy. The Empowered Group of Ministers (EGoM) was constituted to take decisions
on utilisation of gas produced under New Exploration Licensing Policy (NELP)
blocks (including KG-D6, a block of Krishna Godavari basin). Allocation of gas
was broadly classified into core and non-core sectors. Core sectors were to receive gas
before non-core sectors according to the priority decided by the government. The
order of priority under core sector was as follows:
(1) Existing gas-based fertiliser plants producing subsidised fertilisers.

(2) Existing gas-based LPG plants.
(3) Existing gas-based power plants.
(4) City Gas Distribution (CGD) entities for supply to domestic (PNG) and
transport sectors (CNG).
However, with the falling gas production in the KG-D6 basin, to which priority of
allocation for gas has been set, the Ministry of Petroleum and Natural Gas (MoPNG)
initially introduced pro-rata cuts across sectors between July 2010 and March 2011.
But the consistent fall in its production prompted the MoPNG to enforce a priority cut
in the reverse order starting with the non-core sector, CGD, power, LPG and fertiliser
with effect from May 9, 2011. The primary reason for such a pro-rata cut7 was to
insulate sectors like fertiliser plants, power and LPG from the subsidy burden.
510 Manish Vaid
In addition to the shortage of domestic gas production, India also falls short on
infrastructural support, which results in further widening of the country’s natural gas
demand–supply gap.
India’s energy scenario

Given the robust growth in urbanisation and population, India’s existing energy
scenario is undoubtedly at a crossroads, as a large proportion of its energy needs
are being met from costlier energy imports, be it crude, coal or natural gas, through
LNG imports. According to BP Statistical Review of World Energy 2013, coal
continues to hold the major share in India’s primary energy consumption with 53
per cent in 2012, followed by oil and natural gas with 30 per cent and nine per cent
respectively. The remaining eight per cent share is distributed among nuclear energy,
hydroelectric and renewables (Figure 1).

India’s total energy consumption in 2012 rose by 5.37 per cent compared to the
previous year, from 534.8 Million Tonnes of Oil Equivalent (MTOE) to 563.5 MTOE.
This was largely due to increased oil and coal consumption, which were registered at
5.28 per cent and 10.26 per cent respectively. In addition, more than 80 per cent of oil
consumption came from imported crude.
In contrast, natural gas consumption fell heavily by 11 per cent, from 55 MTOE in
2011 to 49.1 MTOE in 2012, due to supply constraints resulting from the sharp fall in
its production.8 Importantly, India with 46.97 trillion cubic feet of proved gas reserves
has only 0.7 per cent of the proven world gas reserves9 but remains the fourth largest
energy consumer after China, the United States and Russia, largely due to its oil and
coal consumption. The aforementioned fall in gas production is largely attributed to
the production of the D1 & D3 and MA fields in the Krishna Godavari basin (KG-D6
basin), which was India’s single biggest gas source, accounting for 35 per cent of
India’s total consumption and 44 per cent of domestic output.10 The average produc-
tion of these fields, after peaking at 69.42 MMSCMD in March 2010, fell by around
86 per cent, recording 10 MMSCMD in December 2014.11 The fall, according to
Reliance Industries (RIL), is due to water loading and sand ingress in wellbores.
Moreover, according to RIL’s latest ‘Revised Field Development Plan’, discoveries
from D1 & D3 fields will continue to show a declining trend in the years to come.12
Figure 1. India’s primary energy consumption, 2012 (total 563.5 MTOE).

Source: BP Statistical Review of World Energy 2013.
The precarious energy situation of India, largely due to the sharp fall in domestic oil
and gas production, has forced it to depend hugely on imported oil and gas.
Consequently, an obvious impact on its economy is felt in the form of rising energy
import bills. Furthermore, little has been done on the clean energy front as India’s
nuclear energy plans are struggling with multiple hurdles, including the Indo-US nuclear
deal13 and the lack, as yet, of an independent regulator.14
Strained relations between India and the US in the recent past, initially caused by a
diplomatic row, have now moved onto other issues as well. The US has dragged India
to the World Trade Organisation on the latter’s solar mission plan15 and several other
issues such as taxes and immigration.16 It is therefore quite unlikely that a break-
through in talks over nuclear energy or the Indo-US strategic partnership17 (which
also includes cooperation in unconventional energy sources such as shale gas and gas
hydrates) can be expected in the near future. Therefore, it is imperative to deal with
existing supply risks, incurred due to insufficient domestic oil and gas production and
unsatisfactory clean energy plans, by importing natural gas through LNG and transna-
tional gas pipelines,18 thereby speeding up the development of natural gas infrastruc-
ture to support energy needs through natural gas.
As far as transnational gas pipelines are concerned, India has already started to
reach out to its immediate and extended neighbours for cross-border trade in natural
gas. These gas pipelines are Iran–Pakistan–India (IPI), Turkmenistan–Afghanistan–
Pakistan–India (TAPI) and Myanmar–Bangladesh–India (MBI). Pushing hard for
these pipelines makes sense in terms of economic investment, as it has a cost-
benefit advantage over LNG. Given the precarious natural gas condition in the
country and the delay in implementation of these three pipelines, the Comptroller
and Auditor General of India (CAG) has sought comments from the Petroleum
Ministry.19 This was against the backdrop of a performance audit of supply and
pricing of natural gas conducted by the CAG.20 Importantly, transnational pipelines
and LNG complement each other well, given the geographic locations and other
geopolitical aspects.
As regards dealing with the existing energy crisis, the government has come up
with some stringent steps, including efforts to curb crude import bills which were on
the rise due to an increase in the prices of global crude oil and petroleum products,
depreciation of Indian currency and increased consumption of petroleum products in
India.21 India’s future oil import bills will therefore be impacted by variation in any or
all of these elements in determining its fiscal trade deficit.
Key drivers for increasing natural gas demand

In the recent past there has been a significant rise in the demand for natural gas,
particularly in sectors like power, fertilisers and CGD which account for 73.21 per
cent of India’s gas consumption, thanks to the government’s Gas Utilisation Policy.
The two key drivers prompting increased consumption of natural gas are environ-
mental and cost benefits.
Natural gas in the power sector, for instance, is largely driven by the shortage of
suitable domestic coal required for thermal power plants and the increased cost of the
imported coal that India needs to blend with domestic coal, which has a high ash
content. This blending improves the overall calorific value of the coal. Power sector
reforms and increased supply of natural gas spurred by increased production of gas in
the KG-D6 basin are also key drivers in the increased use of natural gas in this sector.
512 Manish Vaid
Similarly, in the case of the fertiliser sector, the need for food security and the
increased cost of imported urea has spurred natural gas consumption. For instance, the
average cost of importing urea, which currently stands at Rs 22,935 per million metric
tonnes (mmt), excluding customs duty, handling and bagging, is almost double the
cost of production of urea using the current mix of domestic and imported gas at Rs
11,110 per mmt.22 This sector would therefore do well by using a greater proportion
of domestic gas to keep in check the cost of producing urea.
On the other hand, CNG and PNG have a competitive advantage over existing
fuels like LPG and transport fuels (petrol and diesel, respectively) as it is cleaner,
safer, cheaper and more convenient to use. Therefore, switching to piped natural gas
and compressed natural gas for use in the domestic and transport sectors respectively
was chiefly due to environmental and economic considerations.
India’s natural gas scenario

Until now, supply of natural gas in India has not been able to match the rising pace of
demand, forcing it to import the balance requirement. During 2012–13, for instance,
indigenous production of gas registered around 94.21 MMSCMD, constituting 70.15
per cent of its domestic needs, while the rest of the demand was met through LNG
imports (both through long-term contracts and spot purchases) to meet the total
average daily requirement of 134.28 MMSCMD (Table 1). This was then allocated
to various sectors on a prioritised basis, as approved by the EGoM under the Gas
Utilisation Policy (Table 2).
As observed in Table 2, it was fertilisers, power and CGD sectors that consumed a
whopping 73 per cent share of natural gas during 2012–13. Interestingly, the fertiliser
and power sectors, which are sensitive to any hike in natural gas prices, had to procure
gas through RLNG to meet their respective demands, which during 2012–13
accounted for 34.19 per cent of the total RLNG consumption.
India’s current natural gas scenario therefore indicates that the country will
become a net importer of natural gas in the near future, due to its falling domestic
gas production and increasing LNG imports.
Need for natural gas imports

Rising crude import bills and a steep fall in domestic gas production call for
imports of natural gas through securing long-term contracts as well as transnational
Table 1. Average daily availability of natural gas (2012–13).
Source Average daily availability (MMSCMD)
ONGC 50.90
OIL 5.70
PMT 9.02
Other JV 2.84
KG-D6 25.74
R-LNG (including spot purchases) 40.07
Total 134.28
Source: Ministry of Petroleum and Natural Gas, Government of India.
Table 2. Priority-wise allocation of available natural gas (2012–13).
Total Per cent of

S. No. Sector Domestic R-LNG supply total supply
1 Fertilisers 31.50 8.68 40.18 29.92

2 Gas-based LPG plants for LPG extraction 5.92 0.51 6.43 4.79
3 Power 37.52 5.02 42.53 31.66
4 CGD 6.89 8.71 15.59 11.61
5 Court-mandated customer other than CGD 0.98 0.07 1.05 0.78
6 Small consumers having allocation less than 2.45 2.99 5.45 4.06
50,000 scmd
7 Steel 1.10 3.45 4.54 3.38
8 Refineries 1.87 7.31 9.18 6.84
9 Petrochemicals 2.94 1.96 4.90 3.65
10 Others 1.61 1.38 2.98 2.22

11 Internal consumption—pipeline system 1.44 0.00 1.44 1.07
Total 94.20 40.07 134.28 100
gas pipelines. With respect to reducing crude import bills per se, India’s prime
minister has set a target of curbing the same by $25 billion in the current fiscal
year (2013–14).23 Notably, in 2011–12 this bill had jumped by 40 per cent in a
span of just one year, to $140 billion,24 and further increased to $144 billion in
2012–13.25
On the other hand, the petroleum minister has also stressed the need to increase
the share of natural gas in India’s energy imports.26 According to the Petroleum
Ministry, the estimated financial outgoings resulting from imports of natural gas
are likely to increase to $17.82 billion in 2016–17 from $8.79 billion in 2012–13.27
In the case of crude oil imports,28 such outgoings would increase to $112.7 billion in
2016–17 from $91.3 billion in 2012–13 (with an assumed crude price at $100/billion
barrels (bbl) throughout the projection and 1$ = Rs 55). This analysis therefore further
advocates for natural gas imports, thereby curbing crude imports.
Furthermore, the rising preference for gas as a fuel and feedstock due to its
inherent characteristic features would always support natural gas usage as it would
help to reduce emissions, largely in the transport and power sectors. Therefore,
increased use of natural gas would go a long way in improving India’s energy
security, thereby helping to withstand supply shocks.29
Optimising gas import options

Moving ahead, optimising gas import options by LNG imports, particularly through
long-term contracts and natural gas pipelines, should be done taking into account both
cost and security factors. In this regard, India’s Integrated Energy Policy argues that
using pipelines for importing gas would enhance energy security if the supplying
country makes a substantial investment, as huge stakes would be involved. Moreover,
gas cannot be diverted easily, unlike oil or LNG ships, further reducing the risk of
disruption from the supplier. The risk of sabotaging the pipeline is also mitigated due
to inbuilt strategies, such as involvement of the multiple countries through which it
transits, encouragement of multiple agencies to invest in such projects and using LNG
imports as a buffer stock to transnational gas pipelines.30
514 Manish Vaid
On the other hand, importing gas through long-term contracts provides an alternative
to pipelines when importing gas through pipelines is not possible, as has been the case so
far in India. There has recently been an increase in global LNG trade, particularly since
the Fukushima nuclear disaster, which is bound to move further upwards after the US has
agreed to export its shale gas. This can help in doing away with oil indexation resulting
from price competition, as suggested in the European and Asian markets. US LNG
exports, for instance, have the potential to end the monopoly of Gazprom, making
European gas prices more market determined,31 particularly after the US signs the free
trade agreement with the European Union in 2014.
Moreover, dealing with gas imports through LNG is considered to be more
sustainable compared to import through natural gas pipelines, as the latter are more
susceptible to geographic and geopolitical difficulties. It would also be a preferred
option when the distance between a producer and a consumer country exceeds
2,500 km32 and a sea route comes between those countries. Therefore, the merits
and demerits and their applicability in certain conditions make natural gas imports
through LNG and transnational gas pipelines complementary to each other in dealing
with supply and market risks.
The natural gas infrastructure in India

It is not only important to have enough natural gas reserves and production within a
country, but it is also equally essential to ensure a steady flow of gas from producing
wells and RLNG terminals to the end users to actually benefit people across the length
and breadth of the country. India fails miserably when it comes to cross-country gas
pipelines, which at present cover only about 13,000 km, indicating regional imbal-
ances (Table 3) largely due to gas markets remaining in places where gas sources are
found, deterring further expansion.
India’s existing natural gas infrastructure, which comprises domestic natural gas
trunk pipelines and RLNG terminals, is expected to include in the future transnational
Table 3. Regional imbalance in natural gas infrastructure.
Approximate
percentage of Percentage States having States in the region
total gas of gas infrastructure and lacking gas pipeline
Region pipeline network consumption consuming gas infrastructure
Western 40 53 Gujarat, Maharashtra Goa

Northern 20 26 Delhi, UP, Haryana, Punjab, J&K, HP,
Rajasthan Uttrakhand,
Central 13 3 MP Chhattisgarh
Southern 16 14 TN, AP Kerala, Karnataka
Eastern 00 NIL – Bihar, WB,
Jharkhand, Odisha
North Eastern 10 4 Assam, Tripura Meghalaya, Sikkim,
Arunachal,
Manipur,
Nagaland,
Mizoram
Source: Saumitra Chaudhuri report on policy for pooling of natural gas prices and pool operating guidelines,
August 2011.
natural gas pipelines being pursued by India with various gas-rich nations such as
Iran, Turkmenistan and Myanmar. The following section describes the existing
scenario of such an infrastructure.
Liquefied Natural Gas

Currently, LNG is being procured under the Open General License (OGL) policy of
the Indian government, whereby any entity can import LNG from any country and
terminals are required to be set up for import, storage and regassification after
registration with the PNGRB.33 Multinational companies are also allowed to set up
LNG business in India with 100 per cent foreign direct investment (FDI).
According to the Petroleum Ministry, India’s LNG imports, currently estimated at
115 MMSCMD, are expected to surpass its domestic natural gas production of
113 MMSCMD by 2014–15 (Figure 2).34 India, presently imports LNG on spot and
long-term basis through its two major companies, Petronet LNG Limited (PLL) and
the Gas Authority of India Limited (GAIL). PLL entered into long-term LNG Sale
Purchase Agreements (SPAs) with Rasgas of Qatar in 2004 to procure 7.5 Million
Metric Tonnes Per Annum (MMTPA) of LNG and with Exxon Mobil for supplies
from the Gorgon project in Australia starting in 2015. GAIL signed an SPA to procure
3.5 MMTPA of supplies from Sabine Pass Terminal in Louisiana, US. In addition,
LNG is being imported on a spot basis by PLL, GAIL, RIL and Gujarat State
Petroleum Corporation (GSPL), among others, from countries such as Trinidad and
Tobago, Norway, Oman, the UAE, Yemen, Algeria, Egypt, Nigeria, Australia and
Malaysia. Hazira LNG Private Limited procures LNG only on a short-term basis.
While looking at India’s domestic gas demand in relation to its supply (Table 4), it
is projected that the former will grow at a CAGR of almost 13 per cent from 286
MMSCMD in 2012–13 to 466 MMSCMD in 2016–17, while its supply is expected to
satisfy only 50 per cent of the demand over this period. Therefore, the gas deficit will
grow from 143 MMSCMD in 2012–13 to over 234 MMSCMD in 2016–17. Hence,
India’s existing LNG infrastructure is no match for its current demand–supply gap,
and its terminal capacity which stands at 56.24 MMSCMD in 2012–13 clearly does
Figure 2. Total natural gas availability and import.

Source: Government of India, ‘Presentation on TOR (v): Determining basis/formula for price of
domestically produced gas’.
516 Manish Vaid
Table 4. Natural gas scenarios during 12th Five Year Plan.
2012–13 2013–14 2014–15 2015–16 2016–17
Demand (MMSCMD) 286 322 398 439 466

Supply (MMSCMD) 143 168.9 191.97 199.77 231.74
Deficit (MMSCMD) 143 153.1 206.03 239.23 234.26
LNG Terminal Capacity MMTPA 14.8 19.5 19.5 27.5 30
LNG Terminal Capacity MMSCMDa 56.24 74.1 74.1 104.5 114
Notes: a1 MMTPA = 3.6 MMSCMD.
Table 5. Proposed LNG terminals.

Expected
Location of terminal Owner of the terminal capacity Remarks
Ennore Indian Oil 5 Scheduled Commissioning –

2016
Odisha Indian Oil 5 Feasibility study to set up
Mangalore BPCL – Scheduled Commissioning
2018–19
Kakinada, Andhra Shell, Reliance (ADAG) 5 Scheduled Commissioning
Pradesh (AP) 2014–15
Gangavaram Port, AP Petronet LNG 5 DFR & FEED stage
Kakinada (East Andhra Pradesh Gas 3.5 DFR stage
Godavari Dist.) Distribution Corporation
(APGDC)—a joint venture
of GAIL and AP government
Mundra, Gujarat Gujarat State Petroleum 5 –
Corporation (GSPC)—Adani
Source: Ministry of Petroleum, Government of India.
not support India’s gas deficit of 143 MMSCMD (Table 4). Therefore, efforts are
being made not only to enhance the existing LNG terminal capacities but also to
increase the number of such terminals by the end of the 12th Five Year Plan and
beyond.
The 12th Five Year Plan has called for additional development of LNG import and
regassification capacity on both the east and west coasts of the country. At least seven
new LNG terminals are planned (see Table 5).
The present LNG terminals, with capacity of 14.8 MMTPA, are spread across
three locations, namely Dahej (Gujarat), Hariza (Gujarat) and Dabhol (Maharashtra),
owned by Petronet LNG Ltd (10 MMTPA), Hazira LNG Pvt. Ltd (3.6 MMTPA) and
GAIL India Ltd (1.2 MMTPA) respectively. Petronet LNG Ltd’s Kochi LNG terminal
is expected to be commissioned by 2013–14.
Transnational gas pipelines

Given the growing global competition in LNG markets, particularly since the
Fukushima disaster and the shale gas boom in the US, the Indian government has
recently started to re-emphasise its three transnational natural gas pipelines, thereby
increasing its diplomatic efforts. As aforementioned, this could mitigate India’s supply
risks while complementing its LNG imports. Until now, however, India has been quite
slow in taking forward its pipeline diplomacy, prompting the CAG to intervene, as
mentioned earlier. The following sub-sections describe the existing status of such
diplomatic efforts and the challenges thereof.
Turkmenistan–Afghanistan–Pakistan–India gas pipeline

The TAPI gas pipeline project, which has been on the agenda of Indian policy makers
for more than two decades, continues to move ahead, albeit bumpily. The 1,800 km
natural gas pipeline from Turkmenistan to India via Afghanistan and Pakistan would
be carrying 90 MMSCMD of gas for 30 years. This quantity would be distributed
among three countries, namely Afghanistan (14 MMSCMD), Pakistan (38
MMSCMD) and India (38 MMSCMD).

In this regard, India–Turkmenistan and Pakistan–Turkmenistan bilateral Gas Sales
and Purchase Agreements (GSPAs) were signed on May 23, 2012. Earlier, an Inter-
Government Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA) were
also signed.
On November 19, 2013, the Asian Development Bank (ADB) was appointed
transaction advisor on the signing of a Transaction Advisory Service Agreement
(TASA) to advise on the establishment of the TAPI Pipeline Company, to undertake
technical due diligence and handle the bidding and selection of a commercial con-
sortium leader to build, own and operate the pipeline.35 Immediately after this, a
Service Agreement was signed between the ADB and TurkmenGas (Turkmenistan),
Afghan Gas Corporation (Afghanistan), Inter State Gas Systems (Private) Limited
Corporation (Pakistan) and GAIL India Limited (India).36 Earlier, on February
7, 2013, the Cabinet gave the nod for formation of a Special Purpose Vehicle
(SPV), called TAPI Ltd, in which the initial required contribution is $20 million, to
be contributed equally by promoters of the four countries.37
In September 2013, representatives of the ADB, Turkmenistan, Afghanistan,
Pakistan and India took part in road shows with the objective to attract investments
in laying a natural gas pipeline. The estimated cost of the project has now escalated
from $7.6 billion to around $10 billion.38 According to Turkmen press, companies
such as Chevron, Exxon Mobil, BP, BG Group, RWE and Petronas have expressed
willingness to participate in this project.
However, two recent developments cast doubt on the future of the TAPI gas
pipeline. One is the downgrading of Turkmenistan’s natural gas reserves in 2013
from 24.3 Trillion Cubic Metres (TCM) to 17.5 TCM39 and the other is China’s stake
in the Galkynysh gas fields from which gas will flow into the TAPI pipeline. A deal in
this regard was struck by China to import 25 Billion Cubic Metres (BCM) of gas from
Turkmenistan.40 Now, scepticism is clearly visible from the Indian side as it wants to
fast-track the project, particularly in light of these developments and particularly with
respect to aggression by the Chinese.41
India, being pushed by the US to opt for TAPI in lieu of an IPI gas pipeline
project, will keep an eye on China with respect to its development in this field. The
possibility of China coming between Turkmenistan gas and India’s energy needs is
remote, particularly considering India’s likelihood of attaining permanent membership
of the Shanghai Cooperation Organisation (SCO).42 However, the ever changing
global dynamics between India and China, for example in the South China Sea,
518 Manish Vaid
competition for the acquisition of hydrocarbon assets overseas and border tensions,
particularly with respect to Arunachal Pradesh,43 have the potential to affect the future
prospects of the TAPI gas pipeline in particular and Indo-China relations in general.
On the other hand, the US have apparently taken a back seat in taking this project
forward, at least until the retreat of Western troops from Afghanistan begins in 2014.
Nevertheless, the TAPI’s litmus test ultimately rests on the safe passage of the
pipeline through Afghanistan and Pakistan, as well as a smooth democratic transition
in Afghanistan. The role played by the Taliban in the reconciliation process thereafter
will also impact the smooth functioning of the TAPI project.44 Lastly, apprehensions
over edgy relations between India and Pakistan due to cross-border skirmishes and
terrorism will continue to pose threats to the successful commissioning of the project.
Iran–Pakistan–India gas pipeline

Iran has proposed to supply its gas to Pakistan and India equally in two phases—
phase 1 (60 MMSCMD) and phase 2 (90 MMSCMD—through a 2,500 km45 pipe-
line (Iran 1,100 km; Pakistan 800 km; India 600 km). India until now has made itself
available for the IP gas pipeline.46
Recently, India was quick to celebrate the US–Iran nuclear deal in the hope that it
could solve its energy security woes sooner rather than later, but India still has a long
way to go with respect to normalisation of Indo-Iran energy trade, including the
revival of the IPI natural gas pipeline. The deal, which would offer $7 billion relief to
Iran,47 calls for restriction of its nuclear activities as listed by the White House.48
However, the prospects for a fully fledged energy trade relationship between India and
Iran are conditional on the final outcome of Iran’s complete follow-up on the deal,
which could take some time.
Immediately after this deal, the US State Department continued to maintain
pressure on Iran by offering only a six-month extension of waiver49 to countries
such as China and India to curb their oil imports from Iran. In order to apply further
pressure, the US has blacklisted dozens of additional companies and individuals that
evaded its sanctions,50 resulting in Iranian negotiators quitting recent implementation
talks to show their dissent.
Therefore, despite India engaging with Iran on numerous energy trade talks,
including discussing the IPI natural gas pipeline prospects, progress will remain less
than optimal, at least during the six month relief period of interim sanctions during
which Iran will be watched by Western negotiators.
Considering the IPI pipeline prospects per se, there are other visible barriers
besides the project itself. Iran’s suspension of its $250 million loan to Pakistan to
build part of the IPI project, for instance, could further delay the project.51 This has
therefore compelled Iran and India to consider the option of an 870 mile undersea
natural gas pipeline, running through the Sea of Oman, with a cost of more than $4
billion, delivering 1 billion cubic feet of gas to India per day.52
Moreover, even if these countries strike an IPI gas pipeline deal, issues pertaining to
its easy implementation would always remain in question, despite the fact that Pakistan
has shown evidence of air strikes on the Taliban, forcing them to come forward for
talks. How prolonged and effective such pressure tactics by Pakistan would be remains
to be seen. This is in addition to the ever present threat from Baloch insurgents.53 The
recent blowing up of three natural gas pipelines in north-east Pakistan by the same
groups, which led to a severe shortage in Punjab province, is a case in point.54
Myanmar–Bangladesh–India gas pipeline

After years of Myanmar being isolated, foundations have been laid for its revival
through democratic process and re-opening of its market economy. Its president, Thein
Sein, has already introduced a slew of political and economic reforms, inviting
investors to look for opportunities in various sectors including hydrocarbons, particu-
larly in vast unexplored areas.55
At present, 59 companies are vying for 18 onshore and 30 offshore blocks in
Myanmar, including seven Indian firms.56 These companies have been shortlisted for
onshore blocks after initial rounds. Interestingly, the Myanmar government has made
tenders more lucrative to foreign companies.57 These developments, which would
increase the footprint of Indian oil and gas companies, further raise the prospects of a
Myanmar–Bangladesh–India (MBI) gas pipeline. Notably, the current gas rush in
Myanmar is not for the existing exploited sources but for the huge untapped gas
resources.58 India is now showing its interest in Myanmar’s energy sector and is
revisiting the MBI gas pipeline project, which had stalled since 2005 largely due to
concerns from Bangladesh.
As proposed, the MBI pipeline route would be evaluated further based on its route
through both Bangladesh and the North-Eastern states of India, with significant
differences in length in both areas. If it passes through Mizoram and Assam before
ending in West Bengal, the length would be 1,400 km, whereas if it passes through
Bangladesh the length shortens to only 900 km.59
Gas pipeline infrastructure

Neither of the above two alternatives of importing natural gas, either through LNG or
by transnational natural gas pipelines, would work unless India strengthens its own
domestic natural gas grid, which covers the length and breadth of the country.
Therefore, to ensure smooth domestic supplies of natural gas, it is important to
have a strong gas pipeline infrastructure, irrespective of whether it is produced
domestically or through LNG imports or transnational pipelines.
The three major natural gas pipeline entities transporting gas across the country
are the Gas Authority of India Limited (GAIL), Reliance Gas Transportation
Infrastructure Limited (RGTIL) and Gujarat State Petroleum Corporation Limited
(GSPCL) (Table 6). GAIL holds the largest share in the existing natural gas grid
with around 71 per cent.
Table 6. India’s major natural gas pipeline entities and their network.
Transporter Km (as of March 3, 2013) Per cent of total km
Gas Authority of India Limited (GAIL) 10,784 70.56

RGTIL 1,469 9.61
GSPL 1,874 12.27
Assam Gas Corporation Limited/Oil India 1,000 6.54
Limited (AGCL/OIL)
Indian Oil Corporation Limited (IOCL) 132 0.86
Oil and Natural Gas Corporation (ONGC) 24 0.16
Total 15,283 100
Source: Petroleum Planning & Analysis Cell, Ministry of Petroleum & Natural Gas, Government of India.
520 Manish Vaid
Table 7. Existing natural gas pipeline infrastructure in India.
Length Design capacity

Percentage
Name of pipeline Name of entity Km MMSCMD capacity utilisation
HVJ+GREP+DVPL GAIL 4,222 53.0 54.27

DVPVSL–GREP Upgradation GAIL 1,280 54.0
Dahej–Uran–Panvel–Dabhol GAIL 815 19.9 72.66
Agartala P/L network GAIL 61 2.3 69
Mumbai regional P/L network GAIL 129 7.0 86.84
Assam regional P/L network GAIL 8 2.5 27.20
KG Basin regional P/L network GAIL 878 16.0 55.14
Gujarat regional P/L network GAIL 760 3.9 17.57
Cauvery regional P/L network GAIL 271 3.9 33.83
East West Pipeline (EWPL) RGTIL 1,460 80 42.35

Gujarat Gas Grid network GSPL 1,950 43 66.51
Hazira–Ankleshwar GGCL 73 5.0 37
Assam network AGCL 105 6.0 –
Dadri–Panipat IOCL 132 9.5 28.25
Total 12,144 306
Source: Petroleum and Natural Gas Regulatory Board, Government of India.
Note: Chaisana–Jhajjar–Hissar, which is scheduled to be fully commissioned in the 12th Five Year Plan, had a
meagre capacity utilisation of 1.91 per cent, while Dadri–Bawana–Nangal commissioned in the 12th Five Year
Plan had only 3.61 per cent of utilised capacity. Both these pipelines are shown in Table 8.
As of the 11th Five Year Plan, 12,144 km of natural gas pipeline has been
constructed (Table 7) and another 15,918 km of pipeline network is expected to be
added by the end of the 12th Five Year Plan (Table 8). This includes the 886 km
Dadri–Bawana–Nangal gas pipeline which has already been commissioned.
Therefore, India is expected to have around 28,000 km of cross-country gas pipelines
just before the start of the 13th Five Year Plan.
As shown in Table 3, India’s existing gas markets can be distributed among six
major regions, namely Western, Northern, Central, Southern, Eastern and North-
Eastern. Among these regions, the Western region has the highest consumption of
gas accounting for more than 50 per cent, followed by the Northern and Southern
regions with 26 per cent and 14 per cent respectively. The Central and North-Eastern
regions account for three–four per cent of gas, placing them among the lowest gas-
consuming regions.
The gas pipeline network is concentrated at the place of high gas availability and
consumption, while ignoring the possibility of LNG imports to the place where gas is
not available. Supply of gas through LNG imports could have fixed the regional
imbalances of gas markets, with wider distribution of pipeline network. This has
therefore restricted the development and expansion of gas markets in other regions.
Consequently, the pace of expanding the gas pipeline network has slowed down,
defeating the very objective of providing a uniform supply of natural gas across the
market.
The same was noted by the Standing Committee on Petroleum and Natural Gas
(2012–13) in its report of April 2013, and it therefore stated that laying of pipeline
infrastructure or any part thereof should not be linked to availability of gas as the
same could also be sourced through LNG imports.60
Table 8. Gas pipelines expected to be commissioned in the 12th Five Year Plan.
Addition in design Completion

Name of pipeline Length capacity status
Jagdishpur–Haldia 1,860 32.0 2016

Kochi–Kanjirkkod–Bangalore–Mangalore 1,156 16.0 2013
Dabhol–Bangalore 1,414 16.0 2013
Kakinada–Vasudevpur–Haldia 928 26.7 2016
Kakinada–Chennai 577 26.7 2016
Chennai–Tuticorin 585 13.3 2016
Chennai–Bangalore–Mangalore 538 13.3 2016
GSPL Gujarat Grid (HP—under 420 0.0 2013
construction/under development)
Mallavaram–Bhopal–Bhilwara–Vijaypur 1,688 52.9 2014
Mehsana–Bhatinda 1,611 42.9 2014

Bhatinda–Jammu–Srinagar 512 33.9 2014
Surat–Paradip 1,825 60.0
Shahdol–Phulpur 350 3.5 2016
Ennore–Puducherry–Nagapattinam 1,175 12.5 2016
Dadri–Bawana–Nangal 886 31 Commissioned
Chaisana–Jhajjar–Hissar 445 35 2013, partly
commissioned
Total 15,918 415
Source: Petroleum and Natural Gas Regulatory Board, Government of India.
Another challenge with respect to cross-country pipelines is that most of them are
under-utilised, largely due to non-availability of gas. The capacity utilisation of such
pipelines, as noted by the MoPNG, varies between 1.91 per cent (Chhainsa–Jhajar–
Hissar pipeline) to 86 per cent (Mumbai regional network), resulting in sub-optimisa-
tion of cost.61
The way forward

Drawing from the above, it can be stated that India, besides becoming increasingly
dependent on imported energy resulting from a fall in domestic energy production, is
also lacking infrastructural support in the form of a natural gas grid and LNG
terminals for its natural gas needs. Furthermore, several geopolitical and geographical
challenges are being faced by India in importing gas by transnational gas pipelines.
This has resulted in an increased demand–supply gap in natural gas in the country,
making it energy starved.
In order to improve the gas infrastructural network, it is important to create
additional capacities in existing LNG terminals as well as increasing their numbers,
while also enhancing the spread of the pipeline network such that capacity is
optimised, given the domestic gas demand and the huge capital investments made
in those infrastructures. Moreover, forward linkages such as prospective buyers,
transportation pipelines and other infrastructures should go simultaneously, as sug-
gested by the Standing Committee on Petroleum and Natural Gas.62 This would help
to avoid gas pipelines and LNG terminals laying idle or running below their capa-
cities, resulting in huge losses and wasteful investments.
Furthermore, LNG business without regulations can actually do away with trans-
parency and accountability, as happened in the case of PLL where severe
522 Manish Vaid
discrepancies in the conduct of its business were found by CAG. According to the
auditor, PLL with the help of the Petroleum Ministry has not allowed a level playing
field in LNG business as specific directions were given by the ministry to public
sector companies like GAIL and the Indian Oil Corporation not to take up any LNG
project that would adversely affect PLL’s projects in Dahej and Kochi.63 Such
irregularity therefore calls for suitable guidelines to regulate LNG business. With
exponential growth of natural gas demand and the expected increase in LNG imports,
the importance of such regulation increases. This will not only attract new players but
also provide a level playing field for new as well as existing players.
As far as transnational gas pipelines are concerned, India has to carry on success-
ful diplomacy in order to effectively engage with all the countries in question, from
the point of origin to the immediate neighbouring countries. Furthermore, since
working with these countries can impact the relationships between countries such as
the US and China, India will have to carry out a balancing act with all these countries
without undermining the importance of its immediate and distant neighbours, and
keeping its national interest intact.
In the case of the IPI gas pipeline, for instance, India, while keeping its national
interest at the forefront, should tread cautiously with Iran. It should continue with oil
diplomacy with both the US and Iran not only to keep its IPI gas pipeline objective
alive but also to strengthen its energy and non-energy trade links with Iran. India’s
attempt to increase its trade with Iran does not lessen its need to diversify its energy
needs, so that its over-dependency of imported crude from the Middle East comes down
proportionately to procuring crude imports from other countries such as those in Africa.
The options available for importing natural gas from Iran through undersea gas
pipelines should be kept open, as it could be a viable alternative. But this should not
be construed as an option for an IPI pipeline with a clear objective of bypassing
Pakistan. In fact, both India and Pakistan should move ahead in building their
relationship to the point of no return, come what may. This is possible by resuming
their stalled energy talks, which would in fact be extremely helpful given the power
crisis in Pakistan.
In the case of the MBI gas pipeline, where India does not have the support of a
third country (like Iran for the IPI gas pipeline and the US for the TAPI gas pipeline),
India should proactively leverage its oil diplomacy with Bangladesh through diversi-
fying its energy trade portfolio. It should not only speed up its efforts to export
electricity to Bangladesh, but should also allow passage64 for importing the same
from Bhutan and Nepal. India should also attract investments from power companies
in Bangladesh, and particularly in the North-East region of India, as well as collabo-
rating on renewable energy.65 Furthermore, India should find parallel initiatives for
regional cooperation like the Bay of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation (BIMSTEC),66 which can help India to gain ground in
strengthening overall regional trade and further facilitate the MBI pipeline as well.
Lastly, as mentioned earlier, the major issue concerning cross-country natural gas
pipelines is the under-utilisation of the same. Although LNG can be used to overcome
this shortage, the question of affordability will always arise due to the huge variation
in domestic and imported prices of natural gas. It is only when domestic production of
natural gas is augmented at the desired level that LNG or imports from transnational
gas pipelines could be curtailed.
Given the inherent features of natural gas, the lack of gas infrastructure facilities
cannot halt natural gas demand for a long period. The only way to support this
demand would be to push for pipeline projects which are under construction, while
expanding India’s natural gas grid. For this India has a long way to go, and it will
depend on sufficient availability of marketable natural gas in LNG storage tanks,
levels of indigenous gas production and correct gas price signals at which investors
are willing to explore and produce gas domestically keeping in view the sensitivity of
the power and fertiliser sectors as well in a short-term period. In the longer term, both
these sectors needed to be reformed further to create sustainable gas markets in India.
Conclusion
Natural gas, which has emerged as an alternative fuel due to its inherent features, is
now also being observed as a fuel that can help to significantly reduce oil imports in
India, thereby supporting the Indian economy in dealing with the fall in its rupee and
the current economic crisis. It can also keep a check on India’s growing energy
emissions. A natural gas grid as planned will help in developing and expanding
natural gas markets which will also be fuelled by gas imports through long-term
procurement of LNG and transnational gas pipeline imports.
It also gives India an opportunity not only to revisit transnational gas pipelines but
to seriously push forward the prolonged project in order to improve trade relations
with border and extended neighbours. Commissioning of these gas pipelines will
bring rich dividends to India economically, as it would save huge foreign reserves in
terms of energy transport costs, high volatile crude oil prices and low price energy
equivalence to expensive crude, as well as building up strategic relations with all
respective countries.
Passing through Indian states, it will also help in the expansion of gas markets of
the border states such as Punjab, Rajasthan, Gujarat, West Bengal, the North-Eastern
states, Odisha and Bihar. These pipelines also open up the transit routes and con-
nectivity to the very important energy markets of Central Asia, South East Asia and
the Middle East, which is very much a part of the Modern Silk Road.
Furthermore, these pipelines provide scope for regional energy integration among
South Asian Association for Regional Cooperation (SAARC) countries, which can
promote further energy and infrastructural trade options among its member countries,
thereby boosting their economies. Moreover, instead of waiting for any transnational
pipeline to commence, efforts should be made more towards exploring other easier
and parallel alternatives of trade such as pushing hard for BIMSTEC, restoring energy
trade relations with Pakistan and pursuing an Indo-Iran undersea gas pipeline.
Therefore, in the pursuit of pipeline diplomacy, other non-energy and economic
options should be enhanced with their respective countries.
We can expect maturity of the natural gas infrastructure towards more developed gas
markets characterised by market-determined gas prices around the 13th Five Year Plan,
which could witness the commissioning of the TAPI gas pipeline project, raising India’s
gas availability by around 38 MMSCMD as projected by the ‘Vision 2030’ report.
Notes
1. BP Energy Outlook 2035, January 2014, at http://www.bp.com/content/dam/bp/pdf/Energy-
economics/Energy-Outlook/Energy_Outlook_2035_booklet.pdf (Accessed March 5, 2014).
2. Ernst, Young, ‘Synergy for Energy—Developing a Robust Natural Gas Market in India’,
World Petro Coal Congress, Second International Conference, New Delhi, February 15–17,
524 Manish Vaid
2012; Ministry of Petroleum & Natural Gas, India Hydrocarbon Vision 2025, at http://www.
petroleum.nic.in/vision.doc (Accessed December 20, 2013).
3. PNGRB, ‘Vision 2030’: Natural Gas Infrastructure in India, Report by Industry Group for
Petroleum and Natural Gas Regulatory Board, September 6, 2013, at http://www.pngrb.gov.in/
newsite/pdf/vision/vision-NGPV-2030-06092013.pdf (Accessed December 20, 2013).
4. ‘Why Naturally Choose CNG or LPG over Petrol or Diesel’, The Times of India, June 20,
2013 at http://articles.timesofindia.indiatimes.com/2013-06-20/developmental-issues/
40093178_1_cng-and-lpg-kit-emissions (Accessed December 26, 2013).
5. Mark J. Perry, ‘Natural Gas is 80 Per Cent Cheaper than Oil on an Energy-Equivalent Basis,
and Can Save Commercial Truck Fleets a Bundle’, AEI Ideas, March 21, 2013, at http://www.
aei-ideas.org/2013/03/natural-gas-is-80-cheaper-than-oil-on-an-energy-equivalent-basis-and-
can-save-commercial-truck-fleets-a-bundle/ (Accessed September 23, 2013).
6. ‘8 Mission Launched as Part of NAPCC’, Press Information Bureau, Government of India,
February 24, 2010, at http://pib.nic.in/newsite/erelease.aspx?relid=58313 (Accessed December
23, 2013).
7. Lok Sabha Secretariat, Parliament of India, Nineteenth Report (15 Lok Sabha) of the Standing
Committee on Petroleum & Natural Gas (2013–14) on ‘Allocation and Pricing of Gas’ of
Ministry of Petroleum & Natural Gas, at http://164.100.47.134/lsscommittee/Petroleum%20&
%20Natural%20Gas/15_Petroleum_And_Natural_Gas_19.pdf (Accessed March 6, 2014).
8. BP Statistical Review of World Energy June 2013, p. 25, at http://www.bp.com/content/dam/
bp/pdf/statistical-review/statistical_review_of_world_energy_2013.pdf (Accessed September
2, 2013).
9. Ibid., p. 20.
10. ‘Gas Production from KG-D6 Field: Did Output Fall Force Price Hike?’, The Times of India,
February 12, 2014, at http://timesofindia.indiatimes.com/india/Gas-production-from-KG-D6-
field-Did-output-fall-force-price-hike/articleshow/30242758.cms (Accessed March 5, 2014).
11. Ibid.
12. PTI, ‘Management Committee to Decide Cut in Gas Reserves at RIL’s KG-D6’, The Hindu Business
Line, September 22, 2013, at http://www.thehindubusinessline.com/companies/management-
committee-to-decide-cut-in-gas-reserves-at-rils-kgd6/article5156767.ece (Accessed September
27, 2013).
13. Elizabeth Roche, ‘Nicholas Burns: Afghanistan Will Be a Good Place to Start Discussions
with Iran’, Live Mint & The Wall Street Journal, December 12, 2013, at http://www.
livemint.com/Politics/lRIMJQWiD0GTNiAa3pGQFJ/Nicholas-Burns–Afghanistan-will-be-
a-good-place-to-start-d.html (Accessed December 26, 2013).
14. Ben Doherty, ‘Harsh Criticism for India’s Nuclear Safety Regime’, The Sydney Morning
Herald, December 20, 2013, at http://www.smh.com.au/world/harsh-criticism-for-indias-
nuclear-safety-regime-20131220-hv6lz.html (Accessed December 26, 2013).
15. PTI, ‘US Drags India to WTO on Solar Mission Programme’, The Times of India, February 11,
2014, at http://timesofindia.indiatimes.com/business/india-business/US-drags-India-to-WTO-
on-solar-mission-programme/articleshow/30234657.cms (Accessed March 5, 2014).
16. Indrani Bagchi, ‘Indo-US Ties Hit Low as New Delhi Fights Back Trade and Business
Onslaught’, The Times of India, March 4, 2014, at http://timesofindia.indiatimes.com/
india/Indo-US-ties-hit-low-as-New-Delhi-fights-back-trade-and-business-onslaught/articles
how/31360321.cms (Accessed March 5, 2014).
17. Seema Sirohi, ‘India, US in Danger of Losing the Big Picture of Strategic Partnership’, The
Economic Times, February 19, 2014, at http://articles.economictimes.indiatimes.com/2014-02-19/
news/47490156_1_indo-us-strategic-partnership-narendra-modi-india (Accessed March 5, 2014).
18. Planning Commission of India, Integrated Energy Policy: Report of the Expert Committee,
August 2006, p. xxiv, at http://planningcommission.gov.in/reports/genrep/rep_intengy.pdf
(Accessed August 14, 2013).
19. PTI, ‘CAG Seeks Oil Ministry’s Response on Transnational Gas Pipelines’, The Economic
Times, September 23, 2013, at http://articles.economictimes.indiatimes.com/2013-09-23/news/
42324424_1_performance-audit-iran-pakistan-india-ipi (Accessed September 27, 2013).
20. Rajeev Jaiswal, ‘CAG Begins Audit on Government Role in Fixing Oil and Gas Prices’, The
Economic Times, March 11, 2013, at http://articles.economictimes.indiatimes.com/2013-03-11/
news/37623591_1_entry-conference-power-and-fertiliser-ministries-performance-audit (Accessed
March 24, 2014).
21. PIB, ‘India’s Oil Import Bill at Rs 7,26,386 Crore in 2011–12’, Press Information Bureau,
August 23, 2012, at http://www.pib.nic.in/newsite/erelease.aspx?relid=86628 (Accessed
December 26, 2013).
22. Response of Minister of Petroleum and Natural Gas to the Lok Sabha starred question no. 144
(14) on supply of CNG (what is the rationale in fixing priorities of different sectors in gas
allocation?) asked by Member of Parliament, August 16, 2013.
23. Rajeev Jaiswal, ‘PMO, Vivek Rae to Discuss Cuts in Oil Import Bill’, The Economic Times,
August 16, 2013, at http://articles.economictimes.indiatimes.com/2013-09-13/news/42041796_
1_oil-import-bill-state-oil-firms-oil-ministry.
24. PTI, ‘India’s Crude Oil Import Bill Jumps 40 Per Cent to $140 Bn in FY12’, The Hindu Business
Line, June 13, 2012, at http://www.thehindubusinessline.com/industry-and-economy/indias-
crude-oil-import-bill-jumps-40-to-140-bn-in-fy12/article3523827.ece (Accessed September 13,
2013).
25. ‘Measures Soon to Trim Imports Bill, Prop up Faltering Currency’, The Telegraph, September
6, 2013, at http://www.telegraphindia.com/1130906/jsp/frontpage/story_17318475.jsp#.
Ui14_9J8lRY (Accessed September 13, 2013).

26. ‘India to Import More Natural Gas, Says Moily’, Deccan Herald, June 11, 2013, at http://www.
deccanherald.com/content/338132/india-import-more-natural-gas.html (Accessed September 13,
2013).
27. ‘Gas Price Hike to Benefit State-Run Firms More: Moily’, Business Standard, May 25, 2013,
at http://www.business-standard.com/article/economy-policy/gas-price-hike-to-benefit-state-
run-firms-more-moily-113052400819_1.html (Accessed September 27, 2013).
28. ‘Gas Imports: To More Than Double to $17.8 Billion by 2016–17’, Stock House, May 30, 2013, at
http://www.stockhouse.com/bullboards/messagedetail.aspx?s=NKO&t=LIST&m=32624005&l=
0&pd=0&r=0#yH42BrsAgOkG6AQ4.99 (Accessed September 27, 2013).
29. Planning Commission of India, no. 18, p. 57.
30. Ibid., p. 61.
31. ‘EU-US Free Trade Agreement Could Boost Gas Exports to Europe’, Natural Gas Europe,
July 25, 2013, at http://www.naturalgaseurope.com/eu-us-free-trade-agreement-gas-exports-to-
europe (Accessed September 13, 2013).
32. Van Bloemendaal, Karel, Anna Butenko, Maroeska Boots, ‘Technical and commercial natural
gas value chain’, Groningen: DNV KEMA, working paper, 2013, p. 2, at http://www.edgar-
program.com/uploads/fckconnector/a4ca816a-afcb-4800-bc91-c5c036fd92cc.
33. Lok Sabha Secretariat, Parliament of India, Sixteenth Report (15 Lok Sabha) of the Standing
Committee on Petroleum & Natural Gas (2012–13) on ‘Demands for Grants (2013–14)’ of
Ministry of Petroleum & Natural Gas, p. 64, at http://164.100.47.134/lsscommittee/Petroleum
%20&%20Natural%20Gas/15_Petroleum%20And%20Natural%20Gas_16.pdf.
34. PTI, ‘LNG Imports to Surpass Domestic Production in 2 Yrs’, The Economic Times,
December 5, 2012, at http://articles.economictimes.indiatimes.com/2012-12-05/news/
35620461_1_mmscmd-wellhead-price-natural-gas (Accessed December 31, 2013).
35. ADB, ‘ADB to Assume Transaction Advisory Role for Historic Regional Gas Pipeline’,
November 19, 2013, at http://www.adb.org/news/adb-assume-transaction-advisory-role-
historic-regional-gas-pipeline (Accessed December 26, 2013).
36. ‘Service Agreement for TAPI Gas Pipeline Project Signed’, The Nation, December 26, 2013,
at http://www.nation.com.pk/business/21-Nov-2013/service-agreement-for-tapi-gas-pipeline-
project-signed (Accessed December 26, 2013).
37. Richa Mishra, ‘Cabinet Nod for Formation of TAPI Ltd for Pipeline Project’, The Hindu,
February 7, 2013, at http://www.thehindubusinessline.com/industry-and-economy/cabinet-
nod-for-formation-of-tapi-ltd-for-pipeline-project/article4389091.ece (Accessed December 26,
2013).
38. Zafar Bhutta, ‘TAPI Project: Turkmenistan Offers Global Companies Role in Gas Export’, The
Express Tribune, September 10, 2013.
39. Selina Williams, ‘BP Cuts Russia, Turkmenistan Natural Gas Reserves Estimates’, The Wall
Street Journal, June 12, 2013.
40. Jeremiah Jacques, ‘Beijing “Grabs” TAPI Pipeline from US’, The Trumpet.com, September
14, 2013, at http://www.thetrumpet.com/article/10978.19.0.0/world/energy/beijing-grabs-tapi-
pipeline-from-us (Accessed September 14, 2013).
526 Manish Vaid
41. ‘India for Big Push to Get TAPI Pipeline’, The Hindu, November 23, 2013, at http://www.
thehindu.com/business/Industry/india-for-big-push-to-get-tapi-pipeline/article5383455.ece
(Accessed December 26, 2013).
42. Jeremiah Jacques, ‘Asian Security Bloc Poised for Massive Expansion’, The Trumpet.com,
September 2, 2013, at http://www.thetrumpet.com/article/10924.30156.0.0/world/military/
asian-security-bloc-poised-for-massive-expansion (Accessed September 16, 2013).
43. ‘China, India Spar over Arunachal Pradesh’, Reuters (India edition), November 30, 2013, at
http://in.reuters.com/article/2013/11/30/india-china-border-arunachal-idINDEE9AT04720131130
(Accessed December 26, 2013).
44. Elizabeth Roche, ‘India Recognizes Taliban Role in Afghan Peace Process: Salman Khurshid’,
Live Mint & the Wall Street Journal, July 2, 2013, at http://www.livemint.com/Politics/
xnWpS0JPtnRu84a7JA6k5K/Khurshid-India-recognizes-Talibans-role-in-Afghan-peace-pr.
html (Accessed on December 26, 2013).
45. Abdul Rasheed, ‘India Willing to Join IP Gas Pipeline’, Business Recorder, May 9, 2013, at
http://www.brecorder.com/fuel-a-energy/193/1183760/ (Accessed September 13, 2013).
46. R. Zamanov, ‘Iran, India to Begin New Round of Gas Talks’, Trend, May 27, 2013, at http://
en.trend.az/regions/iran/2154700.html (Accessed September 13, 2013).
47. PTI, ‘Iranian Deal Offers No Relief to India on Oil Imports’, The Economic Times,
November 24, 2013, at http://articles.economictimes.indiatimes.com/2013-11-24/news/
44412778_1_european-sanctions-oil-sanctions-controversial-nuclear-programme (Accessed
December 26, 2013).
48. Jonathan Schanzer, ‘US and Iran See Nuclear Deal Differently’, CNN World, December 6,
2013, at http://globalpublicsquare.blogs.cnn.com/2013/12/06/u-s-and-iran-see-nuclear-deal-
differently/ (Accessed December 28, 2013).
49. PTI, ‘Iranian Deal Offers No Relief to India on Oil Imports’, no. 47.
50. AFP/PTI, ‘Iran Quits Nuclear Talks Protesting US Blacklist Move’, Business Standard,
December 13, 2013, at http://www.business-standard.com/article/politics/iran-halts-nuclear-
talks-after-us-blacklist-move-iran-media-113121300378_1.html (Accessed December 27,
2013).
51. ‘Pakistan Loses Ground to India in Iran Ties’, Press TV, December 26, 2013, at http://www.
presstv.ir/detail/2013/12/25/341795/pakistan-loses-ground-to-india-in-iran-ties/ (Accessed
December 27, 2013).
52. ‘Iran Proposes Deep Water Gas Pipeline for India’, iStockAnalyst, December 17, 2013, at
http://www.istockanalyst.com/business/news/6688760/iran-proposes-deep-water-gas-pipeline-
for-india (Accessed December 27, 2013).
53. As per the 2014 statistics of South Asian Terrorism Portal (SATP), from 2005 until May 5,
April 27, 2014 there were 216 attacks on gas pipelines in Balochistan, at http://www.satp.org/
satporgtp/countries/pakistan/Balochistan/data/Attacks_Gas_pipeline.htm (Accessed December
27, 2013).
54. PTI, ‘Baloch Group Blows up Gas Pipelines in Pakistan’, Deccan Herald, February 10, 2014,
at http://www.deccanherald.com/content/385534/baloch-group-blows-up-gas.html (Accessed
March 8, 2014).
55. ‘Myanmar—the “Promised Land” for Oil and Gas Explorers’, Mizzima, February 23, 2013, at
http://archive-1.mizzima.com/opinion/commentary/8957-myanmarthe-promised-land-for-oil-
and-gas-explorers (Accessed September 28, 2013).
56. PTI, ‘RIL, OVL, Cairn in Race for Myanmar Blocks’, Business Today, August 1, 2013, at
http://businesstoday.intoday.in/story/myanmar-oil-blocks-auction-ril-ovl-cairn/1/197424.html
(Accessed September 28, 2013).
57. Simon Lewis, ‘Burma Govt Allows Oil and Gas Firms to Name Profit-Sharing Terms’, The
Irrawady, September 25, 2013, at http://www.irrawaddy.org/archives/44696 (Accessed
September 28, 2013).
58. Rakteem Katakey and James Paton, ‘Myanmar as Economic Miracle Hinges on Natural
Gas Bounty: Energy’, Bloomberg, June 7, 2013, at http://www.bloomberg.com/news/2013-
06-06/myanmar-as-economic-miracle-hinges-on-natural-gas-bounty-energy.html (Accessed
September 27, 2013).
59. Engr. Khondkar Abdus Saleque, ‘Tri Nation Gas Pipeline: Untold Story’, Arakan Oil Watch,
May 10, 2012, at http://arakanoilwatch.org/2012/05/tri-nation-gas-pipeline-untold-story/
(Accessed July 5, 2013).
60. Lok Sabha Secreteriat, Parliament of India, Sixteenth Report (15 Lok Sabha) of the
Standing Committee on Petroleum & Natural Gas (2012–13), Demand for Grants (2013–
14), p. 119 at http://164.100.47.134/lsscommittee/Petroleum%20&%20Natural%20Gas/
15_Petroleum%20And%20Natural%20Gas_16.pdf.
61. Lok Sabha Secretariat, Parliament of India, Sixteenth Report (15 Lok Sabha) of the Standing
Committee on Petroleum & Natural Gas (2012–13) on ‘Demands for Grants (2013–14)’ of
Ministry of Petroleum & Natural Gas, p. 119 at http://164.100.47.134/lsscommittee/Petroleum
%20&%20Natural%20Gas/15_Petroleum%20And%20Natural%20Gas_16.pdf.
62. Ibid., p. 118.
63. Comptroller and Auditor General of India, ‘Performance Audit on Supply and Pricing of
Natural Gas’, June 25, 2013.
64. Ministry of External Affairs (MEA), ‘Joint Press Statement (Bilateral—between Minister of
Energy and Mineral Resources of Bangladesh and Minister of Petroleum and Natural Gas of
India to Promote Bilateral Energy Cooperation)’, MEA, Government of India, January 13,
2005.
65. MEA, ‘Joint Statement by India and Bangladesh on First Meeting of the India-Bangladesh
Joint Consultative Commission’, MEA, Government of India, May 7, 2012.
66. Rakesh Sinha, ‘Let Us Seal Free Trade Pact, Manmohan Singh Tells Regional Club’, The
Indian Express, March 5, 2014, at http://indianexpress.com/article/india/india-others/let-us-
seal-free-trade-pact-manmohan-singh-tells-regional-club/ (Accessed March 9, 2014).

Strategic Analysis: Click For Updates

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Strategic Analysis: Click For Updates

Încărcat de

Drepturi de autor:

Formate disponibile

This article was downloaded by: [Northeastern University]

On: 29 December 2014, At: 23:04

India’s Natural Gas Infrastructure:

Click for updates

To link to this article: http://dx.doi.org/10.1080/09700161.2014.918428

PLEASE SCROLL DOWN FOR ARTICLE

India’s Natural Gas Infrastructure: Reassessing Challenges and

© 2014 Institute for Defence Studies and Analyses

Ensuring continuous availability of commercial energy at a price affordable to

(1) Existing gas-based fertiliser plants producing subsidised fertilisers.

India’s energy scenario

hydroelectric and renewables (Figure 1).

Figure 1. India’s primary energy consumption, 2012 (total 563.5 MTOE).

Key drivers for increasing natural gas demand

India’s natural gas scenario

Need for natural gas imports

Table 1. Average daily availability of natural gas (2012–13).

Source Average daily availability (MMSCMD)

Table 2. Priority-wise allocation of available natural gas (2012–13).

Total Per cent of

1 Fertilisers 31.50 8.68 40.18 29.92

10 Others 1.61 1.38 2.98 2.22

Optimising gas import options

The natural gas infrastructure in India

Table 3. Regional imbalance in natural gas infrastructure.

Western 40 53 Gujarat, Maharashtra Goa

Liquefied Natural Gas

Figure 2. Total natural gas availability and import.

Table 4. Natural gas scenarios during 12th Five Year Plan.

2012–13 2013–14 2014–15 2015–16 2016–17

Demand (MMSCMD) 286 322 398 439 466

Table 5. Proposed LNG terminals.

Ennore Indian Oil 5 Scheduled Commissioning –

Source: Ministry of Petroleum, Government of India.

Transnational gas pipelines

Turkmenistan–Afghanistan–Pakistan–India gas pipeline

MMSCMD) and India (38 MMSCMD).

Iran–Pakistan–India gas pipeline

Myanmar–Bangladesh–India gas pipeline

Gas pipeline infrastructure

Transporter Km (as of March 3, 2013) Per cent of total km

Gas Authority of India Limited (GAIL) 10,784 70.56

Table 7. Existing natural gas pipeline infrastructure in India.

Length Design capacity

HVJ+GREP+DVPL GAIL 4,222 53.0 54.27

East West Pipeline (EWPL) RGTIL 1,460 80 42.35

Addition in design Completion

Jagdishpur–Haldia 1,860 32.0 2016

Mehsana–Bhatinda 1,611 42.9 2014

The way forward

Ui14_9J8lRY (Accessed September 13, 2013).

S-ar putea să vă placă și