Liquefied Natural Gas (LNG) is set to herald a new era of energy production and consumption in energy starved Asia, according to a new report released by the National Bureau of Asian Research (NBR).

According to the research, Asian countries will see a doubling of their natural gas requirements from current numbers in the coming decade. Even as countries such as India and China will remain reliant on coal for their principle power production, natural gas will start playing a bigger role due to its availability and clean nature as a fuel.

The report also shows that much of Asia’s natural gas demand is going to be met by supplies originating from countries such as Australia, Canada and the United States. This illustrates the fact that for countries such as India and China, energy security in the gas sector will also remain based on factors of orchestrating imports and investing in fields abroad, meaning relying on other countries and their geo-political quirks.

“Currently, if you see, a lot of challenges are faced by India when it comes to LNG, especially with the pipeline projects such as TAPI. Main challenges here are geo-political since India is planning to source gas from as far as Turkmenistan via risky locations such as Pakistan and Afghanistan. It will take another decade or so for the first proper pipeline project to come into play as far as India is concerned,” says a source close to the Indian energy policy power corridors, who did not wished to be identified.

In recent economic conditions, demand for LNG has weakened due to a slipping rupee and general poor performance of domestic industries. Traditionally, LNG prices in global markets go up during winters in Europe and North America and during this period India’s LNG imports are expected to decline further.

However, more than 24,000 MW of power generation capacity via gas powered plants is currently lying idle due to inadequate supply of domestic gas. At the moment about 10% of India’s total power generation comes from gas powered plants. Many plants traditionally running on LNG are tending to shift to furnace oil as it has price parity with expensive imports, unlike LNG. The NBR report notes that India has domestic gas reserves available, however due to many lingering policy issues such as pricing, most of these reserves remain untapped and the country imports from states such as Qatar to meet the deficit. According to some industry experts, if India plays its cards right on LNG, it could become a net exporter in the future as well.

Natural gas as a major fuel has also taken Indian companies such as Gas Authority of India Ltd (GAIL) to invest in markets such as the US. GAIL has plans to invest more than Rs 40,000 crore in American gas fields as it looks to enter the US market as Washington looks to allow energy imports directly from its shores soon. India and the US have also set up a task force to increase energy trade now that US is set to become a major exporter of oil & gas, and assist energy companies from both US and India to invest in each other’s markets.

India imported highest 11.63 million tonne of LNG in 2011-12, which came marginally down to 10.90 million tonne in 2012-13. India’s dependence on imported LNG was on rise due to fall in domestic production of natural gas.

Source: http://www.sunday-guardian.com/business/lng-will-boost-india-energy-security