Indian Natural Gas Market More Mature Than Chinese

New Delhi, October 30: | Updated: Oct 31 2002, 05:30am hrs
The natural gas market in India may be categorised by insatiable demand, low supplies and uncertain pricing but it is attracting unprecedented attention from the international gas industry.

The market is perceived to be more developed simply because there is a huge demand and ways are being devised to meet it. India has a limited gas market. But it is more mature than even China, says International Gas Union (IGU) secretary general Peter K Storm.

He does not need to look far to substantiate his observation. On the streets of Delhi, demand for gas has been concretised by the need to clean-up the citys environment. The Indian governments will to change and the markets tremendous growth within the last two years are his reasons for placing the Indian market over China.

Sustainability of supply is a problem to be overcome by the gas industry and organisations like IGU. After all, India has more projects in pipeline than actual gas and is still looking at ways of reaching out to sources in the Middle East, Russia and Bangladesh. A pipeline from Iran and Oman will either touch an uncertain Afghanistan and a troublesome neighbour Pakistan, or go submarine, hugely increasing the project cost. Bangladesh also offers little hope on gas supply.

Considering the geo-political problems facing all piped gas projects, Mr Storm feels the best option for India is to source gas from Russia. One has to realise that even west Europe was accepting not more than 30 per cent of gas from Russia till 1999. But now the situation has changed.

A mix of fuel is the best solution for India like for any other country. Besides, domestic coal reserves will always be there to fall back upon, he said.

When asked which industries were best suited for gas use, he said, transport and power. But a market incapable of absorbing a high-priced product has to be ensured about sustainability of cost. Gas-based power plants will find few takers if they are incapable of offering competitive price to cash-strapped electricity boards. This is an Indian problem. Somebody needs to find a solution he added.