Indian Oil Ministry Forms Draft LNG Policy, Eyes 70 MTPA Capacity by 2030

In an effort to raise the share of natural gas in India’s energy basket, the Ministry of Petroleum and Natural Gas has come out with a draft liquefied natural gas (LNG) policy which has set a target of increasing the country’s LNG re-gasification capacity from 42.5 million tonnes per annum (MTPA) to 70 MTPA by 2030 and 100 MTPA by 2040.

To boost the usage of LNG as a transport fuel, the policy aims to convert 10 percent of long-haul heavy-duty trucks in India to LNG-compatible models. The policy also batted for incentivising vehicle manufacturers to come up with LNG-compatible vehicle models or retrofitting of vehicles through tax and cess exemptions.

To ensure availability of the fuel to the transport sector, the policy also pitches for establishing 1,000 LNG outlets for long-haul, heavy-duty trucks and other vehicles covering major highways and commercial centres across the country. This may see investment to the tune of Rs 100 billion in a span of three years.

LNG is being preferred over diesel and compressed natural gas (CNG) on long-haul vehicles because of its high energy density that will help it to cover around 700-800 kilometres on a single fill. In addition, LNG prices are around 40 percent cheaper than diesel. India has set a target of increasing the share of natural gas in its energy basket from 6 percent to 15 percent by 2030.

As of December 2020, the share of LNG in India’s total natural gas basket comes to around 58 percent. Stakeholders will be able to comment on the draft policy within the next 15 days.