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India will invest Rs 60 billion in LNG

Part I: 21st century is the century of gas

Part II: India has become self-reliant in refining

We would be bringing in liquefied natural gas or LNG on a big scale from other countries, wherever it is available. We have already decided to set up two LNG terminals.

The company Petronet LNG has been registered and it has started working. It has invited tenders. One LNG terminal will be in Gujarat. Its capacity will be 5 MMTPA. For that, tenders have been invited, parties have been short-listed.

The first stage of the technical bid is short-listed and that is proposed to come up in 2003. The other will be set up in Cochin, Kerala, with a capacity of 2.5 MMTPA. The total investment in this will be Rs 60 billion.

This important decision is being implemented to ensure that we have more LNG. In addition to this, for carrying the gas, a pipeline is being constructed from Jamnagar in Gujarat to Lone in Uttar Pradesh. The pipeline will be 1,230-km long; the project is in its final stages of completion.

India will have the longest pipeline in the world

It will also be the longest pipeline in the world. The cost is around Rs 12.40 billion. The project was to be completed around 2001. We have advanced the completion date and it would be ready for use around December 2000.

Changing role of LPG in India

Many people are using liquefied petroleum gas or LPG as an auto fuel. This is inappropriate, illegal. Sure, LPG is eco-friendly, it should be tried. So we have amended the Motor Vehicles Act. We are formulating the laws, as to what type of cylinder, where it is to be fixed, etc.

Those cylinders will be at a commercial price. I hope the price will be accepted by everyone. In the last year alone, we have given 12.7 million new LPG connections. In the last 40-50 years, only 42.5 million connections were given.

Now LPG will be available all over India across the counter. But there are rural areas where private companies won't go. So we've decided to open 2,300 new agencies out of which 500 would be exclusively for rural areas.

Sugarcane alcohol as fuel -- the Brazil model

In Brazil, they use sugarcane and the molasses to produce alcohol that is blended with petrol. Brazil has been doing this for the last 25 years. Now we are planning to try this out in India.

Anna Patil, a sugar technologist, has studied the system in Brazil. He will guide us. As soon as we came to power, we decided to do something about this.

We decided to have three pilot projects in Maharashtra and Uttar Pradesh because these are two major sugar producers.

The first project will be at Miraj in Sangli district of Maharashtra. Work has started. We have to buy alcohol. I took all the alcohol manufacturers into confidence and they said that they are ready to supply. And I have made all the preparations that by December 31 production of gasohol would start.(Gasohol = a popular fuel blend of ten per cent ethyl alcohol and gasoline; it was popular in the American Midwest in the late 1970s. Gasonol = a blend of 20 per cent sugarcane alcohol with gasoline and kerosene; used in the Philippines in the 1930s)

They have requested two to three months more to manufacture alcohol as per purity specifications.

The second gasohol centre in Maharashtra would be at Manmad. In UP, the centre would be at Bareily.

In Brazil, it is successful because people use petrol more. In India, the petrol:diesel ratio is 1:6. There are more diesel vehicles in India. So we have to ensure that we buy petrol at a price which is beneficial commercially to the oil company and also to the farmer.

Strategic importance of public sector oil companies

The public sector oil industry has played a key role during the recent Kargil war. Even in 1972, when there was war in Pakistan, foreign oil companies did not cooperate with the government's war effort as they should have.

In the Kargil war there were 400 hundred casualties. We have decided to give the affected family members petrol pumps and gas agencies. Some 180 petrol retail outlets have been sanctioned, beneficiaries have been identified; some 145 LPG distributorships have been finalised, names have been finalised.

SEE ALSO:

Interview with Petroleum Minister Ram Naik

Interview with Divestment Minister Arun Shourie

EXTERNAL LINKS:

India's Ministry of Petroleum and Natural Gas

OPEC

Statement by Ram Naik on revision of prices of LPG, kerosene and aviation fuel

Biographical sketch of Ram Naik

Money

Specials

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