India has set ambitious goals for its domestic power sector, knowing that a reliable energy supply will be a key driver of economic growth. The bulk of India’s energy will continue to come from oil and gas, Oil and gas have direct influence on every other commodity in the market.Oil and gas have direct influence on every other commodity in the market, so development of the country’s hydrocarbon resources is a key element of the government’s energy agenda. With a solid commitment from the authorities to jumpstart domestic oil and gas exploration, improve midstream distribution networks and gain efficiencies in energy production, the sector opens up myriad of opportunities.
Primary energy mix for India
At the end of 2013, India had 215.1 MMTPA of refining capacity, making it the second largest refiner in Asia after China. Private joint venture companies own about 41 per cent of total capacity.The government allows 100 per cent Foreign Direct Investment (FDI) in upstream and private sector refining project.The FDI limit for public sector refining projects has been raised to 49 per cent without any disinvestment or dilution of domestic equity in the existing PSUs. Government has enacted various policies to encourage investments.
India‟s energy demand is expected to double to 1,464 Mtoe by 2035 from 595 Mtoe in 2013. Moreover, the country‟s share in global primary energy consumption is projected to increase two fold by 2035. Oil consumption is estimated to reach 4.0 mbpd by FY16, expanding at a CAGR of 3.2 per cent during FY08–FY16F. By 2025, India is expected to overtake Japan to become the third-largest consumer of oil.
LNG imports accounted for about one-fourth of total gas demand. India's gas demand is estimated to more than double over the next five years India increasingly relies on imported LNG; the country was the fourth-largest LNG importer in 2013 and accounted for 5.5 per cent of global imports.
Currently, nearly 44 cities and towns in India are covered under City Gas Distribution networks, 46 new districts in the country would see city gas distribution networks being rolled out in 2015-16.To facilitate expansion of the cleaner fuel, the government has allocated 100% domestic gas supply for city gas usage.