As India prepares itself to become a gas-based economy, an issue that it will need to address is development of a skilled workforce, besides capital investment, says David C. Carroll, President and CEO of GTI — a non-profit research, development and training organisation focussed on global energy and environmental challenges.
Carroll, who is the former president of the International Gas Union, a global association aimed at promoting technical and economic progress of the gas industry, said India is taking measures that will help in transitioning to a gas-based economy, but the country will need to develop competencies to build and operate technically-advanced natural gas infrastructure.
Speaking to
“It will be doable, but at the same time, will be a big challenge,” he added.
Environmental choice
When asked whether it makes sense for India to shift to gas, given that it is heavily-imported, he said that the benefits of natural gas include improvement in the environment. The rewards are worth the effort as can be seen from the global experience, Carroll said, adding that these economies (that have made the transition) are quite successful despite importing a lot of gas.
“I am not saying that Japan and South Korea are the same as India, but they rely on imports for virtually all of their requirements,” he said,adding: “But this is something I would not recommend for India. There should be effort to enhance security of supply through diverse sources. That includes domestic production, onshore, offshore, conventional gas...may be in the future, unconventional gas like coal bed methane and shale gas.”
Talking about infrastructure, Carroll said India must “look at pipeline initiatives.”
Referring to China, he said that the country is not only importing more than its demand, but also very aggressively developing pipelines including cross-country and transnational infrastructure. “It may not be an apt option for for India, but long-distance pipelines are something many countries are considering to diversify their portfolio.”
Asked if sub-sea pipelines could be an option for India, he said: “ It is an option that should probably be explored.” Flowing gas through pipelines has been proven to be an economical, technically feasible and commercially successful way to deliver gas, he pointed out. “ It will be a nice complement to the long-term LNG purchases as well as enhanced domestic production,” he added.
Trading options
Price will play a key role in shifting to gas, and currently, there is no benchmark for gas price. On the likelihood of success if India were to develop a trading hub, he said: “Typically in a hub, you need lots of buyers and sellers, and you need a point where they are inter-connected to the hub. One also needs liquidity both in terms of financial markets and the product itself. It would be difficult to set that up if you are relying on long-term contracted quantities of gas.”
“I don’t think you have all the pieces in place yet, but there is an intent to do it,” he said.