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| Raha emphasizes on proper policy framework, pricing issue and regulation for growth in gas sector |
January 17, 2007
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Pricing, Regulation and a far sighted policy is the cornerstone for development of the gas sector said Mr. Subir Raha, former C&MD and Chief of TRIdea (standing for Team Raha Ideation) speaking on ‘Natural Gas in India-the next decade’ at a Petrotech 2007 Plenary Session.
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Indicating that potential demand could be 3 to 4 fold and supply at a comparable pace, he regretted that not a ‘cent’ is being spent on creating capacity for consumption of the incremental production or the proposed piped imports.
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With the 3 LNG terminals at Dahej, Hazira and Kochi at different stages of operations/construction Indian companies are ‘quibbling’ over city gas supply which forms a minor market segment.
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While production increase from domestic and imports across eastern borders are a possibility, but nothing much will happen on ground till ‘government takes its hands off prices’.
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Regretting that subsidies are skewed he advised the government to ‘deliver the subsidies to the deserving customer’ rather than ‘one and all’.
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Mr. Raha had strong observations on the powers of the proposed ‘Regulator’. He pointed out that regulating pricing would be out of his purview the office would be just be a mute ‘monitor’ of prices.
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Foreign suppliers he reminded follow the market and not ‘minutes of the Ministry Meetings’. ‘The consumer too is concerned with quality, quantity, delivery, pricing & continuity, and not the source’.
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The Regulator who is a spokesperson for the Ministry cannot deliver much as the government assumes the roles of ‘the administrator, prosecutor and judge’.
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Without ‘clarity’ and ‘guarantee’ how will any project achieve financial closure Mr. Raha questioned.
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Production by ONGC, Reliance and GSPC are anybody’s guess in the next five years. Skilled manpower, critical equipments, technology and specialized materials would be at a premium. There is no clarity of the dynamics of these elements in times to come.
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Assesment of resources and assurance for investments are not in place as yet.
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Existing consumers are facing shortage while new consumers for the proposed production are yet to be identified.
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While there are great opportunities, he hoped that the Government and industry would face realities.
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Mr. William Harvey Adamson, Managing Director of British Gas India while agreeing with Raha thought that differential pricing of gas across segments can be arguably justified. In the energy mix India would increase its gas component from the present 9 percent to 20 percent by 2024.
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While the discoveries in the East Coast are world class, the exploitation could make the gas ‘expensive’ as the finds are from deepwaters. He was diffident about the possibility of laying pipelines as they have been worldwide mired in complexities.
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Mr. Adamson gave one more E to the four Es comprising the theme of Petrotech 2007. E for expansion as India is on an ‘expansion spree’ he added.
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The session was moderated by Mr. P. Dasgupta, Managing Director and CEO of Petronet LNG Ltd spoke of the need for convergence of upstream, midstream and downstream.
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