In a significant move towards bolstering energy security, India is set to establish a strategic natural gas reserve with a storage capacity of up to 4 billion cubic metres (BCM). This reserve, approved by Oil Minister Hardeep Singh Puri, aims to serve as a crucial backup during supply emergencies and contribute to market stabilization.
The decision comes in response to recent global gas market disruptions caused by geopolitical factors, prompting a reevaluation of India’s energy security strategy. The estimated cost of this strategic gas storage facility is between $1-2 billion, with a targeted capacity of 3-4 BCM.
India, aiming to increase its gas share in the energy mix to 15% by 2030, emphasizes the need for a robust domestic gas market. This includes a large storage capacity, a well-connected pipeline network, and a mature gas exchange. Additionally, the storage facility positions India as a regional hub, allowing it to supply neighboring countries like Sri Lanka, Bangladesh, and Myanmar in the future.
The feasibility report, due in three months, will provide crucial details such as cost estimates, potential locations, construction timelines, and business models. Depleted wells from ONGC and Oil India are being considered for storage, with ONGC identifying two wells in Gujarat and Oil India pursuing similar initiatives in the North East.
As India transitions to a gas-based economy and anticipates increased gas consumption, the strategic gas reserve becomes vital in managing short-term market challenges. Currently importing half of its consumed gas, India’s move aligns with practices in major gas-consuming economies like Europe and China.
