Harnessing Natural Gas

Natural gas is the cleanest and most efficient fossil fuel and India looks to harness it with the 2600 km Urja Ganga pipeline project. It aims to connect states of Bihar, Jharkhand, West Bengal and Odisha. Another significant project which is underway is at Talcher, for the efficient gasification of coal to produce nitrogenous fertiliser. In the future, India seeks to leverage the large domestic coal reserves to increase the gas supply. This makes perfect sense as India is urbanising at a rapid pace.

Setting up of a gas grid rather than depending upon coal based power plants would help curtail carbon emissions and reduce emissions intensity. Currently the gas usage in the energy mix stands at 6% while the objective is to raise the figure to 15%. Gas projects now underway would help achieve such targets. The Urja Ganga pipeline would have a capacity of 16 million standard cubic feet per day (mmscmpd), while India overall gas consumption is 166 mmscmpd.

The current gas pricing formula currently takes into account Henry hub, Alberta, National Balancing Point and Russian Prices, which need a revamp. The way forwards is to have an efficient and market determined domestic gas pricing mechanism. A robust pipeline network would allow such a market to function and help determine the prices.