Saturday, 24 December 2016

Gas sector needs $10 bn capex to meet energy mix target

The ambitious plan to more than double natural gas share in the national energy mix from 6.5 per cent in 2015 to 15 per cent over the medium term will need investments of at least Rs 65,000 crore just for augmenting infrastructure for gas import and for laying pipelines, according to a report.

Share Market Services  | NSE & BSE Market Tips


The ambitious plan to more than double natural gas share in the national energy mix from 6.5 per cent in 2015 to 15 per cent over the medium term will need investments of at least Rs 65,000 crore just for augmenting infrastructure for gas import and for laying pipelines, according to a report.

An analysis shows ramping up gas import facilities and regassification facilities will entail investments of around Rs 35,000 crore, while it will need to lay an additional 9,000 km of pipelines in the East and the South regions for last mile delivery, entailing another Rs 25,000-30,000 crore investment, said the report by rating agency Crisil.
Commodity market tips

Explaining the rationale, Rahul Prithiani, Director at Crisil, said if the share of gas in the energy mix has to rise to say 10 per cent by 2020, it would mean a doubling of gas consumption to over 100 billion cubic meter from current levels. But given that domestic gas production is limited, demand for imported LNG would surge three-fold to 65 BCM, or over 50 million tonne.

Explaining the rationale, Rahul Prithiani, Director at Crisil, said if the share of gas in the energy mix has to rise to say 10 per cent by 2020, it would mean a doubling of gas consumption to over 100 billion cubic meter from current levels. But given that domestic gas production is limited, demand for imported LNG would surge three-fold to 65 BCM, or over 50 million tonne.

This would entail investments of Rs 30,000-35,000 crore for regassification terminals and another Rs 25,000- 30,000 crore for laying around 9,000km of pipelines, he added.

The Government move to lower coal dependency is in line with the commitment it made at the last Paris climate change meet (Conference of Parties 21), which aimed at reducing the carbon intensity of GDP by a third from 0.37 kg (per PPPUSD of GDP) in 2005.

Energy mix refers to the proportion of various fuels in the overall energy consumption of a nation.

According to Crisil, renewables are likely to be the key driver of this green energy drive, with the government targeting 175 GW of renewable power by 2022.

Gas, though a relatively cleaner fuel than coal and other liquids, continues to be a higher-cost option, which restricts its usage and one of the main reasons for this is the weak pricing power of end-users which further limits usage in the power and urea sectors.

Given the gas production constraints, low cost- competitiveness of LNG, and under-developed infra, meeting this ambitious target will be an onerous task, and will require significant push by the government through policies and incentives, said the report.

Additionally, gas consumption by the power sector needs to rise significantly if the energy mix goal is to be met. The share of gas-based power in total generation plunged to under 4 per cent in fiscal 2016 compared with 12 per cent in 2011 due to inadequate domestic supplies and unviable LNG prices.






If you want more information regarding the Market News & many other tips like Tradeindia Services , Intraday Tips , MCX Normal Calls , Indore Advisory Company , Bullion Market Tips , Share Market Services , NSE & BSE Market Tips , Free MCX Market Tips , MCX Premium Tips , Bullion Energy Tips , Commodity market tips , Give Miss call ☎ @ Toll Free Number 📲 18003157801

No comments:

Post a Comment

25 stocks fell 10-30% in just 4 trading sessions

In the S&P BSE Mid-cap index, three stocks slipped 10-30% which include names like L&T Finance Holdings, Piramal Enterprises, and ...