India has already secured deals to import about 14 million tons of LNG a year and is in discussion with suppliers for an additional 20 million tons per year, Indian Oil Minister Veerappa Moily told an International Energy Forum conference this week, Press Trust of India reports.
He didn't disclose the sources of the supplies.
However, the cost of the imported gas -- at least $10 million to $12 per million metric British thermal units -- represents a challenge for India, as consumers are accustomed to government-fixed prices of $4-$5 million mmBtu, he said.
"Making this LNG a cheaper comparable fuel option is a great task," the minister said.
Government data show that India relies on imports for about a quarter of its natural gas consumption."
There are three LNG import terminals operating in India: Shell's Hazira terminal, which is being expanded to 5 million mt/year capacity from 3.6 million mt/year; a 10 million mt/year terminal at Dahel, owned and operated by Petronet India and the 5 million mt/year-capacity Dabhol terminal, partly owned and operated by GAIL, India's largest state-owned natural gas processing and distribution company.
India is the fifth largest importer of LNG after Japan, South Korea, the United Kingdom and Spain and accounts for 5.5 percent of the total trade, Moily said.
"With LNG demand expected to grow at 5-6 percent a year till 2020 and 2-3 percent thereafter, India, along with other Asian counterparts, is driving this growth,'' he added.
But India is facing a widening gas shortage mostly because of falling output from Reliance Industries' offshore block, where the company says it is encountering geological difficulties, The Wall Street Journal reports.
And state-owned Oil and Natural Gas Corp. said last month that its natural gas production declined to 5.58 billion cubic meters from 6.03 bcm a year earlier.
Indian Ambassador to the United States Nirupama Rao, in an April editorial in The Wall Street Journal said that boosting LNG exports from the United States to India "would provide a steady, reliable supply of clean energy that will help reduce our crude oil imports from the Middle East and provide reliable energy to a greater share of our population."
Noting that India relies on imports to meet 73 percent of its oil needs, Moily said in his IEF speech that he wants to reduce imports 50 percent by 2020, 75 percent by 2025 and for India to eventually achieve self-sufficiency and energy independence by 2030.