India recently received the first-ever cargo of Liquefied Natural Gas (LNG) from Russia under a 20-year contract. This is a part of India’s strategy of diversifying its supply sources and catering to the rising local energy needs.
LNG Kano, an LNG carrier reportedly carried cargo from Russian supplier, Gazprom, and docked at an import facility in the Dahej port in Gujarat.
In this context, Union Minister of Petroleum and Natural Gas, Dharmendra Pradhan, stated that it was a golden day for the country’s energy roadmap. He added that the government was committed to transforming India into a gas-based economy, and India would continue to need import, as the nation’s local production was rising at a pace not sufficient to meet the rising local demands.
Meanwhile, India is said to import nearly 45% of the total amount of natural gas it consumes. And, the government plans to increase the share of natural gas in the country’s energy mix from 6.5% currently to 15% by 2030. And, in this context, the gas supplied by Russia is significant, and so would the supplies from the US, the Middle East, and other regions to India.
It has been reported that GAILNSE, the state-run gas marketer had signed a 20-year agreement in 2012 with Russia’s energy giant, Gazprom for the purchase of 2.5 million tonnes of natural gas a year. Apart from which, it also has long-term contracts with the suppliers from the US for 5.8 million tonnes per year of LNG.
A spiked price fall in LNG, followed by a fall in crude around four years ago, made imported natural gas more affordable in India, which also increased the local demand for the commodity. India and Russia have reportedly strengthened their energy partnership in the last few years. And, a consortium was led by Russia’s Rosneft invested around $13 billion in 2017 to purchase a 20 million tonne refinery and a network of petrol pumps in the country.