India looks to natural gas to reduce its carbon footprint

India is increasingly looking for sources of natural gas to meet its fuel requirements as part of its commitment to reduce carbon emissions by a third by 2030, as a switch to cleaner burning fuels has an important part of this transition.

Prime Minister Narendra Modi's visit to Iran later this month would be a turning point in the country's transition from a mainly oil consuming country to a major consumer of natural gas, petroleum minister Dharmendra Pradhan said.

Iran is likely to award the development rights of its Farzad B gas field and the downstream development of LNG plants for Indian firms, a move that could result in India consuming or marketing its production share.

India, the world's third-biggest oil importer, is both boosting domestic production of natural gas and buying cheap liquefied natural gas (LNG) as it seeks to curb its greenhouse emissions, oil minister Dharmendra Pradhan said.

New Delhi has promised to reduce its carbon emissions by a third by 2030, and a switch to cleaner burning fuels is an important part of this.

India recently reworked the terms for a long-term LNG deal with Qatar and the country's main importer of natural gas Petronet LNG is in talks with Exxon for a reduction in the price of gas from Australia's Gorgon project.

"Gradually we are shifting towards a sustainable gas economy," Reuters quoted Pradhan as stating in an interview.

At present, gas forms about 8 per cent of India's energy mix, while oil accounts for more than a quarter.

However, the share of gas is increasing and the country's gas supply deficit is expected to widen from 78 million cubic metres a day (mscmd) this fiscal to 117 mscmd by 2021-22, according to government estimates.

India is now looking for long-term contracts as, under the changing scenario, India could be bigger market for natural gas than the combined European Union.

Pradhan last month visited Saudi Arabia, the United Arab Emirates and Iran to deepen ties with its main oil suppliers, in an effort to better integrate the fuel economy.

Pradhan said Prime Minister Narendra Modi's visit to Iran later this month would "certainly" deliver concrete results.

LNG prices have slumped by three quarters to $4.65 per million British thermal units (mmBtu) and Pradhan expects hefty LNG investments worldwide to ensure affordable long-term prices, a trend that "will suit India as a consuming country."

India is also building import terminals on its eastern and western coasts and pipelines to boost industrial use of gas. In fiscal 2015-16, India's gas production declined by about 4.2 per cent, while imports rose around 15 per cent.