Lok Sabha Question No. 105 (STARRED), answered on 2023-07-27
Subject: Purchase of LNG from International Market
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Kuruva Gorantla Madhav, Adala Prabhakara Reddy

## LOK SABHA

## STARRED QUESTION No. 105

## TO BE ANSWERED ON 27 th  July, 2023

## Purchase of LNG from International Market

- *105.  SHRI KARUVA GORANTLA MADHAV: SHRI ADALA PRABHAKARA REDDY:

## पेोलयम और ाक ृतक गैस मंी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a)  whether the domestic coal shortage is forcing the Indian companies to purchase expensive Liquefied Natural Gas (LNG) from international market;
- (b) if so, the details thereof and if not, the reasons therefor;
- (c) whether the Government has taken steps to mitigate the dependency of Indian companies on expensive imported LNG; and
- (d) if so, the details thereof and if not, the reason therefor?

## ANSWER

## पेोलयम और ाक ृतक गैस मंी ( ी हरदप संह पुर )

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI HARDEEP SINGH PURI)

- (a) to (d)  A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF THE LOK SABHA STARRED  QUESTION  NO.  105  ASKED  BY  SHRI  KARUVA  GORANTLA  MADHAV AND SHRI ADALA PRABHAKARA REDDY, MPs TO BE ANSWERED ON 27 TH  JULY, 2023.

(a)  &  (b)  Natural  gas  in  India  is  primarily  used  by  Fertilizer  industry  (33%),  City  Gas Distribution (21%), Power (14%), Refinery (7%) and Petrochemicals (4%). The usage of Natural Gas in sponge iron and industrial sectors is less than 3%. Accordingly, the usage of natural gas in the industrial sector, where it could replace coal, is not significant. Further, there is no shortage of coal in the country. The all India coal production in the year 2022-23 was 893.19 Million Tonnes (MT) in comparison to 778.21 MT in the year 2021-22 with a growth of about 14.77%. During the last 2.5 years, the average prices of spot LNG (West India Marker) has increased from USD 7.64 per MMBTU in Jan-21 to USD 49.53 per MMBTU in Oct-2022 and now has reduced to USD 9.3 per MMBTU in July-2023.

(c) & (d) Government has prepared a road map to reduce the import dependency on hydrocarbons including  LNG  by  adopting  a  five-pronged  strategy  which  includes,  Increasing  Domestic Production,  Adopting  biofuels  &  Renewables,  Energy  Efficiency  Norms,  Improvement  in Refinery Processes and Demand Substitution.

For  increasing  domestic  gas  production,  Government  of  India  has  notified  Hydrocarbon Exploration  and  Licensing  Policy  (HELP)  on  30 th March  2016  for  the  award  of  exploration acreages shifting from Production Sharing mechanism  to Revenue Sharing mechanism. Government  further  notified  the  policy  reforms  on  28 th February  2019,  where  many  of  the processes and approvals were relaxed to promote 'Ease of Doing Business', Revenue Share from Category  II  &  III  type  of  basins  were  removed,  except  for  windfall  gains,  7  years  Royalty Holiday for Deep & Ultra-deep blocks, concessional Royalty Rates- 3.5 % for Deepwater and 1.4 % for ultra-deep water blocks, and fiscal incentives have been provided for early monetization of fields along with Marketing and Pricing freedom for natural gas. The gross domestic production of Natural gas has increased from 28,672 MMSCM  in 2020-21 to 34,450 MMSCM in 2022-23 showing a growth of more than 20% during this period.

Ministry of Petroleum  and  Natural Gas  has launched 'Sustainable Alternative  Towards Affordable Transportation (SATAT)' initiative on 1 st October 2018, with the aim of establishing an ecosystem for production of Compressed Bio Gas (CBG), which can replace natural gas, from various waste/ biomass sources and for promoting its use along with Natural Gas. Conversion of waste/  bio-mass  into  CBG  results  in  multiple  benefits  viz.  reduction  in  natural  gas  imports, reduction of Green  House  Gas  emissions,  reduction in burning of agriculture residues, remunerative income to farmers, employment generation, effective waste management etc.

Source : PPAC data

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