NEW DELHI, Oct 20 (Reuters) - High prices threaten India's
goal to boost the use of gas in its energy mix as some
industries are looking at switching back to coal and petcoke, a
top bureaucrat in the federal oil ministry said on Wednesday.
Prime Minister Narendra Modi has set a target to raise the
share of natural gas in the country's energy mix to 15% by 2030
from about 6.2% now to cut India's carbon footprint.
In the long run, India want to raise the use of renewables
and biofuels and had turned to the use of natural gas in the
"intermediate period" despite holding vast reserves of coal, oil
secretary Tarun Kapoor said at the India Energy Forum.
"Now this very high gas price has given us a message that
probably we can not rely on natural gas. The rather basic
question now is can we rely on imports," Kapoor said.
Liquefied natural gas (LNG) under long-term deals costs
about $11-$12 per million British thermal units (mmBtu), versus
more than $38 per mmBtu on Asia's spot gas LNG-AS market
currently and a record high of over $56 hit earlier this month.
To cut its carbon footprint, India allowed some consumers to
shift to gas. Kapoor said these industries might switch back to
coal and petcoke due to the higher gas prices. Petcoke, short
for petroleum coke, is a byproduct of the oil-refining process.
India, the world's third biggest oil consumers and importer,
is also exploring strategies to cut its crude import bill
including asking companies to jointly negotiate for oil purchase
Kapoor said Indian refiners should look at having long-term
oil contracts of more than one year's duration with a fixed, or
near to fixed, price component.
"In oil, term contract is just a one-year contract and it is
not a fixed-price contract," Kapoor said.
"The contract can be fixed-price or linked to some index
which is not so volatile. It is just a question of reducing
risk," he said.
(Reporting by Nidhi Verma; Editing by Nick Macfie)