India Plans to Build Strategic Natural Gas Reserve of 4 billion cubic metres (BCM)

India is making plans to establish a strategic natural gas reserve that can store up to 4 billion cubic metres (BCM) of imported gas. This reserve will serve as a backup in case of supply emergencies and help stabilize the domestic market, people familiar with the matter said. The decision to set up the gas reserve was given the green signal by oil minister Hardeep Singh Puri, who directed Oil and Natural Gas Corp (ONGC), Oil India, and GAIL to prepare a detailed feasibility report.

In the past, India has considered building a strategic gas storage facility as part of its energy security plan but was deterred by the high costs involved. However, the recent disruption in the global gas market due to geopolitical factors has prompted a reevaluation of this strategic policy. The targeted gas storage capacity is 3-4 BCM and is estimated to cost $1-2 billion.

India's aim is to increase the share of gas in its energy mix to 15% by 2030, up from the current 6%. To achieve this, it is crucial to develop a robust domestic gas market with a large storage capacity, a well-connected pipeline network, and a mature gas exchange. Additionally, having a large gas storage facility will position India as a regional hub and enable it to supply neighboring countries such as Sri Lanka, Bangladesh, and Myanmar in the future, a source said.