The ministry of petroleum and natural gas will seek cabinet approval for a domestic gas trading platform as the country seeks to adopt a better mechanism for price discovery of both domestic as well as imported gas.
India will soon have a natural gas trading platform, which could lead to market-determined pricing of gas, minister of petroleum and natural gas Dharmendra Pradhan said at the end of the India Energy Forum by CERAWeek.
''We will soon move the Cabinet to seek approval for setting up a gas trading platform,'' the minister said on the sidelines of the international seminar on energy on Tuesday.
Pradhan also said his ministry was in the process of creating an internal think-tank to assist in priority areas like foreign investment, moving towards gas-based economy, financing models, using technology and curbing hydrocarbon imports.
This will be similar to global hubs such as Henry Hub of the US and National Balancing Point of the UK.
''Both imported natural gas (liquefied natural gas or LNG) and domestically produced gas will be traded at the hub. This will enable market determination of the Indian price for natural gas,'' the Hindu BusinessLine quoted a government official as saying.
India's average gas consumption is a low 6-7 per cent against the global average of 24 per cent, Pradhan pointed out, even as he said the government proposes to allow marketing freedom to all new production.
The minister also projected investment possibilities to the tune of $300 billion in the country's hydrocarbon sector in the next 10 years. The government also proposes to create a ''think-tank'' to help achieve import reduction and transition to a gas-based economy, he said.
The think-tank will assist in the creation of a gas infrastructure, formulate financing models for projects, and achieve price competitiveness, he added.
''We are looking for new business models to diversify our electricity generation by combining gas and renewables and energy storage. We will diversify our vehicle fleet and make it more efficient and cleaner through modern fuel specifications, electric vehicles, and other alternatives like CNG and LNG.
''As our `Make in India' campaign restores India's manufacturing strength as the backbone of a growing economy, our energy intensity of GDP is likely to rise, making a diversified and cleaner energy mix even more important,'' Pradhan said.