Shell Energy Asia VP Ajay Shah speaks to ETEnergyWorld

New Delhi: India will have to address key issues pertaining to access to natural gas pipelines and ensure a level-playing field by including natural gas into the ambit of Goods and Service Tax (GST) if it wants to unlock the country’s natural gas potential, Ajay Shah, Vice President, Shell Energy Asia told ETEnergyWorld.

“Countries like US and Europe were able to increase the use of natural gas in their overall energy mix primarily due to unbundling of natural gas marketing and transportation services. While India does have open access to its pipeline and a regulator in place the practical reality is it is difficult to access natural gas pipeline infrastructure for a variety of reasons,” Shah said in an interview.

He added that the company was a bit disappointed because natural gas was being left out of the ambit of GST.

According to Shell’s Liquefied Natural Gas (LNG) outlook 2019, India’s natural gas share in the overall energy mix will remain between 5-10 per cent by 2035. The projection made have been an interpretation of Wood Mackenzie’s data, the company said.

Shah told ETEnergyWorld that the company’s 5 Million Tonne Per Annum (MMTPA) Hazira LNG terminal plans to have a truck loading unit which will allow transportation of natural gas through trucks and the facility can also be used to fuel heavy-duty vehicles run on natural gas.

Shell had last month acquired 26 per cent equity interest in the Hazira LNG and Port from Total. According to data available on Petroleum Planning and Analysis Cell (PPAC), Hazira LNG recorded a capacity utilization of 87.6 per cent in the April-January period of 2018-2019

“We are excited about our journey in India. We may in the future think about expanding our Hazira terminal. We may also in the coming years choose to invest in India’s City Gas Distribution (CGD) network, get into gas-based electricity generation and are also eyeing the possibilities in using natural gas in the transportation sector. Petronet has already started a project for setting up LNG fuel stations across the country, which is a good move,” Shah said.

Shah said that while China currently has over 300,000 heavy-duty vehicles running on natural gas and is taking big strides towards the use of natural gas in the transportation sector, India currently has none. China currently uses 6.7 Million Tonne of LNG for road transport and has close to 2,552 LNG fuel stations across the country.

According to Shell, LNG’s share of India’s total gas supply mix exceeded 50 per cent for the first time in 2018.

“India is also using LNG to meet its increasing needs for a secure energy supply. Domestic gas production dropped and the resulting increase in demand for imported gas was met by LNG (up 10% year on year). LNG’s share of India’s total gas supply mix exceeded 50% for the first time in 2018,” the report read.

It adds that in 2019, 35 million tonnes of additional LNG supply is expected to come on line with Europe and Asia being the major demand centres for the additional supply.

According to the report, more than 70 per cent of energy demand growth by 2035 is estimated to be met by gas and renewables combined, with natural gas supplying more than 40 per cent of the additional demand and major LNG importing countries like China and India are putting policies in place which drive preference for gas over coal.

As appeared in article written by Bilal Abdi (ETEnergyWorld)

Source: ETEnergyWorld