The reserve will also help the country cope with demand spike and price rise in the event of border skirmishes and war like situations that played out recently with China.
New Delhi, January 11 - Neftegaz.RU.
After oil, India may now build strategic reserve
of gas to further strengthen the country's energy security and shield itself from supply disruptions and frequent price fluctuations coming from perennial political risks in the prime energy supplying countries in the Middle East and Africa.
The country had already taken advantage of low oil prices
in the 1st
quarter of FY21 (April-June) to fill its existing strategic oil reserve, making big savings.
And the government now feels that it's time for similar infrastructure for gas.
Spot LNG prices are currently at around $6 / mmBtu, though a little higher than early last year, still attractively priced to push the initiative on strategic reserve.
For building strategic gas reserve, the plan is to inject depleted gas fields with fuel or develop storage in large salt caverns.
The plan for strategic gas reserve emerges from an official study that suggests that consumption of gas would grow 2-fold by 2030, resulting in large gap between demand and domestic production.
This would increase imports of gas and take them closer to levels of oil imports, where the country
has to depend on overseas supplies to meet over 85 % of its domestic consumption demand.
At present, almost half of the domestic consumption of gas is met from imports. With the government keen on building a cleaner gas based economy, consumption is set to rise, pushing up imports of LNG
The idea of a strategic gas reserve is not new to India. Several heavy energy consuming countries have build storage system to ensure supply security.
The US has almost a third of global gas storage
while Russia, Ukraine, Canada and Germany together account for another big chunk.
China also has gas storage facilities.