Russia-Ukraine War Ended Government of India's Cheap Natural Gas Dream
Natural gas doesn't eliminate carbon emissions. But it's an improvement over diesel. India had nine of the world's ten most polluted cities in 2020.
Indian government decided to raise the share of natural gas in India's energy mix to 15% by 2030 from below 7% now, as part of plan to improve air quality.
Better options, such as green hydrogen, need to be scalable and affordable, beside being reliable for emerging markets.
The Indian government enthusiastically declared two years ago that $66billion in investments were lined up into everything from pipeline to city gas infrastructures and LNG regasification terminals.
In February, Russia invaded Ukraine. Suddenly billions of dollars in investments are on shaky ground.
Call it a poor judgement or bad luck, India's expansion of natural gas coverage to more than 90% of its population has come at a worse time.Many companies won keenly contested licenses to add new areas to city gas networks.
European spot prices of natural gas are stabilizing, but at three times the average of the past decade. Contracted supplies of LNG are cheaper, but with Europe scrambling to secure non-Russian sources, the discount is reducing.
The Russian gas deficit will lead to an annual global LNG shortage of nearly 100million tons by the middle of the decade, according to sources.
India's domestic natural gas production has been on decline for a decade even on stoking demand by pricing it cheaply.
Air quality improvement, however is not the only reason to give a massive push to city gas projects. PNG, piped natural gas, delivered to urban homes relieves the demand pressure on LPG cylinders. These can then be pushed to rural areas where poor families can migrate to cleaner cooking gas - LPG, instead of burning wood, coal, dung cakes or kerosene.
The trouble is with supply.
Due to ongoing war in Ukraine, imported cargo costs a lot more. The lofty expectations for demand growth of gas can come down crashingly, putting a question mark on the financial viability of the licenses won by the investors. Indian consumers donot have the income power of their European counterparts, nor can they cope with higher prices.
The dream of cheap natural gas couldn't have lasted anyway, all that the war in Ukraine may have resulted is to end it abruptly.
European nations looking for non-Russian sources has contributed in increased LNG export authorization by US. New long term authorization of LNG export projects allows export of additional natural gas as LNG to any country not prohibited by US law or policy.
Rapid advancement of CCUS (carbon, capture,utilization and storage) on partnership basis can potentially capture tons of CO2(carbon dioxide) from industrial sources, including LNG plants. more
Indian government decided to raise the share of natural gas in India's energy mix to 15% by 2030 from below 7% now, as part of plan to improve air quality.
Better options, such as green hydrogen, need to be scalable and affordable, beside being reliable for emerging markets.
The Indian government enthusiastically declared two years ago that $66billion in investments were lined up into everything from pipeline to city gas infrastructures and LNG regasification terminals.
In February, Russia invaded Ukraine. Suddenly billions of dollars in investments are on shaky ground.
Call it a poor judgement or bad luck, India's expansion of natural gas coverage to more than 90% of its population has come at a worse time.Many companies won keenly contested licenses to add new areas to city gas networks.
European spot prices of natural gas are stabilizing, but at three times the average of the past decade. Contracted supplies of LNG are cheaper, but with Europe scrambling to secure non-Russian sources, the discount is reducing.
The Russian gas deficit will lead to an annual global LNG shortage of nearly 100million tons by the middle of the decade, according to sources.
India's domestic natural gas production has been on decline for a decade even on stoking demand by pricing it cheaply.
Air quality improvement, however is not the only reason to give a massive push to city gas projects. PNG, piped natural gas, delivered to urban homes relieves the demand pressure on LPG cylinders. These can then be pushed to rural areas where poor families can migrate to cleaner cooking gas - LPG, instead of burning wood, coal, dung cakes or kerosene.
The trouble is with supply.
Due to ongoing war in Ukraine, imported cargo costs a lot more. The lofty expectations for demand growth of gas can come down crashingly, putting a question mark on the financial viability of the licenses won by the investors. Indian consumers donot have the income power of their European counterparts, nor can they cope with higher prices.
The dream of cheap natural gas couldn't have lasted anyway, all that the war in Ukraine may have resulted is to end it abruptly.
European nations looking for non-Russian sources has contributed in increased LNG export authorization by US. New long term authorization of LNG export projects allows export of additional natural gas as LNG to any country not prohibited by US law or policy.
Rapid advancement of CCUS (carbon, capture,utilization and storage) on partnership basis can potentially capture tons of CO2(carbon dioxide) from industrial sources, including LNG plants. more
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Fool's errand would be the right phrase, as whenenever one expects the well-off taking the environmentally more sound decisions, those with the means find other alternates for spending their wealth on, with environmental concerns being made out with the future. War spending by Russia proves this point, when the money could have been better spent in making the green transition. more
May 06
Russia has been trying to develop a complete domestic LNG delivery chain, but its efforts still fall short and will be further hampered by its increasing commercial and international isolation. Russia embarked on a major expansion of its LNG sector well before its invasion of Ukraine as part of its efforts to diversify the reach of its gas exports. Achieving the green transition is `both technically and politically difficult'. Its a bit of a `fool's errand', frankly to say `this is going to happen this day' and `this is going to happen that day'. What we need to do is keep moving forward. Mearsk, for example, the world's second largest shipping line, consumes around 12million tons of oil in an year - this is the amount of oil world produces daily. So its like a `chicken-and-egg' dilemma, where people are tried to get convinced to produce green fuel. But green fuel producers refuse to make any commitment to supply Mearsk with green fuel as Mearsk doesnot have green fuel propelled ship. Its like going in a circle, where we end up where we started from. more
May 05
Important that natural gas is a far cleaner than diesel extracted from petroleum of which our 80% requirement are met through imports. This more so when India as pertinently mentioned in the note above, had nine of the world's ten most polluted cities in 2020. Gas importing countries in Europe doing better for the environment if dependant upon Russia. Not possible logistically laying a similar supply pipeline between us both nations as we have the mighty Himalayas that makes a connect topologically nearly impossible. Only a much costlier, LNG imports possible, and that too now, with Russia-Ukraine war stands stymied. more
May 05
