NEW DELHI, Mar 24: Small-scale LNG, a concept that is growing popular overseas, offers hope to Indian industrial units located away from national gas grid to use the clean fuel without being constrained by lack of pipeline connectivity, which should in turn help in developing the domestic gas market. The only infrastructure requirements for small-scale LNG are small-sized import terminal and low re-gasification facilities close to location of consumers. The liquefied fuel can be transported via road. Infrastructure can be commissioned quickly by using pre-fabricated equipment and pre-assembled modules. In a survey conducted by consulting firm PWC, half of the respondents felt that small-scale LNG holds the highest potential for meeting India’s gas requirements. Significantly, domestic gas shortages have hobbled development of a well-functioning, integrated market as investors have been wary of putting money into pipeline projects in the absence of foreseeable supply. Lack of proactive policy and regulations to encourage development of pipeline without being burdened by the logic of visible demand has also harmed growth of the sector. Consequently, small industrial units located away from gas grid are forced to use expensive naphtha and fuel oil as it is not economically feasible to lay additional pipeline network to connect them. In recent years, a number of gas-based power plants and gas-consuming industrial units have come up on the hope of assured gas supplies through pipelines. But these projects were left stranded when corresponding pipeline projects failed to keep pace with them. Small-scale LNG can help in reviving these projects. However, like every new concept, small-scale LNG will have to certain challenges in order to become successful in India, agreed energy experts at the 2nd Indian Oil Gas Conclave held recently here. For one, since such infrastructure will be owned by private players and contracts will be short-term, there will be demand-supply dilemma initially, pointed out experts. While consumers may want security of supply, suppliers will need assured demand to go ahead with investments, they elaborated. In view of that, experts underscored the need of strategic cooperation between suppliers and consumers. In addition, safety regulations will have to be framed for handling and operating procedures and global best practices adopted, experts added. (UNI)
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