India hedges energy bets: Starts LNG supply from Russia

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Within weeks of starting the first ever long-term LNG supply from the US, India opened up yet another source of natural gas with the arrival of the first LNG shipment from Russia.

Russia is currently, world’s largest crude oil & second largest gas producer in the world. While, lndia is world’s 3rd largest energy consumer & 4th largest import of LNG.

The LNG vessel “LNG Kano” carried 3.4 trillion BTU of LNG from Gazprom meant for GAIL, India’s gas utility.

The vessel was received at the terminal of Petronet LNG in Dahej, Gujarat.

The move will make India’s energy supplies less sensitive to geopolitical tensions.

Before the current efforts at diversification of natural gas supplies, India used to import about 15 mln tons of LNG per year. Out of this, Qatar used to contribute about 9 mln tons and Nigeria about 2.3 mln tons.

Under the diversification move, India has agreed to buy 3.5 mln tons of LNG per year from the US and 2.5 mln tons from Gazprom, Russia.

Oil Minister Dharmendra Pradhan, who was present to received the ship, said India is committed to becoming a gas-based economy.

To realize this aspiration, investments are being made for augmenting natural gas infrastructure, including pipelines, LNG import terminals and City Gas Distribution networks, he added.

GAIL plans to have over 16,000 km of pipeline by 2020. It currently commands a 75% market share in gas transmission and has a gas trading share of over 50% in India.

It is also planning to invest over a billion dollars into its City Gas Distribution projects.

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