India to set up gas pipeline operator to boost gas use

NEW DELHI: India will set up a transport system operator to auction gas pipeline capacity, finance minister Nirmala Sitharaman said on Monday, as the country seeks to deepen its gas markets and reduce its carbon footprint.

India, a signatory to Paris Climate accord, will also launch a Hydrogen Energy Mission in the next fiscal year to March 2022 for generating hydrogen from green power sources, Sitharaman said in her budget speech.

Setting up of a transport system operator mirrors similar entities in western countries where gas markets are developed and use of the cleaner fuel is very high.

"Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis," Sitharaman said in her budget speech.

India, which wants to raise the share of gas in its energy mix to 15% from the current 6.2%, has taken steps such building gas import facilities, the setting up of gas trading exchanges and the provision of marketing and pricing freedom to producers.

Current Indian rules mandates pipeline owners to offer a quarter of their pipeline capacity to other suppliers under open access rules.

The nation hopes to raise its gas transmission capacity by 580 million cubic metres a day (mmcmd) from the current 330 mmcmd as its doubles current 17,000 kilometre gas pipeline network in 3-4 years. Most of the pipeline network is owned by state-run gas marketing firm GAIL (India) Ltd.

"It will help in raising gas use in India as importers, suppliers and consumers whoever wants to use pipeline capacity will get access in a transparent manner without approaching the multiple pipeline owners," said Satpal Garg, a member of the Petroleum and Natural Gas Regulatory Board.

India plans to roll out its cheaper cooking gas supply scheme to another 10 million poor households while providing gas connections to small industries and households in 100 more districts in three years, Sitharaman said.

She said a gas pipeline will be built in the mountainous union territory of Jammu and Kashmir, bordering Pakistan.