Oct. 9 (UPI) -- Liquefied natural gas could help satisfy growing energy demands in India, especially if commodity prices continue to improve, Wood Mackenzie found.
In its October forecast, the Reserve Bank of India predicted inflation would hold steady at 4.5 percent through 2019 and real gross value added growth, the grand total of all revenues, should increase from 6.7 percent through 2018 to 7.4 percent in 2019. The growth translates to a stronger energy appetite and nearly half of India's energy comes from oil and natural gas.
New Delhi this week hosts an annual IHS-CERA conference. From the sidelines, Terence Ang, a senior analyst for Wood Mackenzie, said demand for India should outpace domestic supplies, especially for natural gas. To meet the shortage, Wood Mackenzie expects the appetite for liquefied natural gas will increase 36 percent when compared with three years ago.
"We expect a glut in LNG supplies will allow surplus volumes to flow to India," he said in an emailed statement.
The market footprint for LNG is expanding, especially for countries sensitive to geopolitical issues. A long-awaited gas pipeline from Iran has yet to materialize for India, as has a similar Western-backed project from Turkmenistan.
Coal still dominates the power sector, though Wood Mackenzie estimates that if the price for Brent crude oil, the global benchmark, reaches $66 per barrel, LNG will become more competitive to other fuels.
Brent was around $55 per barrel early Monday.
Indian Petroleum Minister Dharmendra Pradhan said earlier this year that expanding domestic oil and gas developments, including shale reserves and coal-bed methane, could help the country achieve its goals of reducing its foreign dependency by the start of the next decade. At a time when major oil producing nations are stemming production to address supply-side market strains, Pradham said energy consumers had concerns of their own.
A report from General Electric, which has operations in both renewable and conventional energy resources, said the Indian government has ambitious plans to boost oil and gas production, but has fallen short of its goals in the past. GE estimated that India could exhaust its proven resources within the next 25 years, but added that barely a quarter of the country's reserves have been explored.