India will see an investment of about USD 300 billion over the next decade in setting up of refineries, oil and gas pipelines and expansion of city gas distribution network as it builds infrastructure to cope with the massive demand surge, Oil Minister Dharmendra Pradhan said Tuesday.
Speaking at KPMG's ENRich 2018 energy conference here, he said India is the third largest energy consumer in the world after the US and China and its energy demand will grow three-fold by 2040.
According to BP Energy Outlook, India will be the key driver of global energy demand in the next 25 years.
To meet the massive demand, it is building world's largest oil refinery in Maharashtra at a cost of USD 40 billion, he said adding about USD 3 billion is being spent on laying gas pipelines to connect the eastern part of the country to the gas grid.
Also, liquefied natural gas (LNG) receipt terminals at Ennore in Tamil Nadu and Dhamra in Odisha are being set up at a cost of Rs 10,000 crore for supplying imported gas to eastern and southern states, he said.
City gas distribution network to supply CNG to automobiles and piped natural gas to households is being expanded to cover 70 per cent of the population in the next 2-3 years. "Up to 2014, only 66 districts in the country were covered under city gas distribution. Work on 174 districts has begun which will further expand to cover over 400 districts in the next 2-3 years covering 70 per cent of the population and 52 per cent of geography," he said.
To promote clean energy, the government has launched a scheme to produce bio-CNG from agri waste by setting up 5,000 plants in the next five years. "These plants will not only help tackle the problem of agricultural waste burning but also bring monetary benefits to farmers," he said.
Remunerative price for ethanol extracted from sugarcane has led to availability for blending in petrol increasing from 38 crore litres in 2013-14 to 150 crore litres in 2017-18, he said. "Work is also underway to establish 12 modern bio-refineries at a cost of Rs 10,000 crore to produce 2nd generation ethanol," he said.
While India leaps to Bharat Stage-VI or Euro-VI grade fuel from current Euro-IV fuel by 2020, it is investing in countries such as Russia to secure its oil needs, he said.
India is 83 per cent dependant on imports to meet its oil needs and investing in oil and gas fields abroad gives it security of supplies.
"Our dwindling domestic oil and gas production is a concern," Pradhan said adding the government has sought to address these through several policy and regulatory changes including moving to a revenue-sharing regime for oil and gas production, open acreage licensing policy and incentivising investments in techniques for raising output from old and stagnant fields.
Marketing and pricing freedom has been allowed for acreage being auctioned under the new policy and as a next step, a gas trading hub would be set up soon to evolve an indigenous pricing.
"The global investor industry is today keenly looking at Indian energy sector as an attractive investment destination," he said. "About USD 300 billion would be invested in the coming decade."
Pradhan said although the global economy has got a lot of traction on the path of recovery, the momentum in the recent past has been affected by the headwinds of trade war, geopolitical risks, political fractures, debt-related risks and vulnerabilities in the financial markets.
"Given this context, it is encouraging to see a strong spurt in India's growth supported by a slew of policy measures and structural reforms undertaken to address the critical problems of stimulating and stabilizing the economy," he said.
"We strongly believe that the Indian growth story remains credible riding on the back of political stability, a commitment to fiscal consolidation and key structural reforms that have made India a bright spot in the global landscape.
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