 "Shale gas and hydrates have tremendous potential in India: David Carroll")
David Carroll, president, International Gas Union (IGU), a Barcelona-based global association aimed at promoting the technical and economic progress of the gas industry, says that India needs a better pricing regime following the global cues for gas producers, or a separate price index for the country. In an exclusive interview with Shine Jacob, he says the future of India's hydrocarbon sector would be shale and gas hydrates and its potential estimates in the country is under-estimated. Edited excerpts:
India wants to increase the share of natural gas in its energy mix from 6.5 per cent to 15 per cent in the next three to four years. What should be the strategy for this?
Indian Prime Minister Narendra Modi has lined up a four-point agenda that includes access, sustainable future, efficiency and security in energy sector, which should be the way forward for most of the countries. When we think about natural gas, we should consider the portfolio; it is growing rapidly as a transportation fuel, it is effectively used as a feedstock in sectors like fertilisers, which are important in India. When you are looking to grow from 6.5 per cent to 15 per cent, you have to look at those sectors and develop those. It needs infrastructure development in transmission as well as the distribution network.
What do you think about the domestic gas production scenario of India and do you think its potential in production is minimal?
First of all, I believe that technology is the key driver here. In general, I think supply will follow the demand. I know it's very early stage for shale gas and in most parts of the world but you have to try it putting some extra investments and be more aggressive. Another resource of gas that we see in the medium-term horizon for India is hydrates. India is involved in some major programmes with the US and Japan to develop that. Shale and gas hydrates offer tremendous future if technology economic hurdles can be addressed. As far as shale and gas hydrates are concerned, India’s estimate is probably under-estimated.
Do you think India needs to open up regarding the pricing aspects to increase production and attract investments?
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In IGU, we advocate for transparency of pricing and smart regulations. When companies make investments, they are looking long-term in terms of pricing and they are willing to accept risk, if the potential return is good. IGU sees that India has tremendous potential for economic development and energy use. For years ahead, natural gas will be a key part of your portfolio.
What is your take on having a national gas hub for India?
In India, I see limitations of infrastructure. The current leader of gas imports is Japan and they have a Japan index. In future, India is well positioned to go ahead. The ability to allow market price to filter its way into economy is important. It is all about how you manage your action in response to market pricing.