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Buyout buffer for oil, gas

New Delhi, Aug 6: India will step up efforts to acquire more overseas oilfileds and gasfields and pick up stakes in foreign coal mines to meet the increasing shortfall in domestic energy supplies.

The first meeting of the inter-ministerial energy coordination committee, chaired by Prime Minister Manmohan Singh, today deliberated on oil, gas and coal availability in the next 25 years and ways of meeting the deficit.

“Acquisition of oil, gas and coal equity overseas will be the focus for meeting the energy shortfall,” said Planning Commission member Kirit S Parikh.

He said the country required 338 million tonnes of coal in 2005-06, but the domestic supply would not exceed 317 million tonnes. Next year, the deficit would rise to 31 million tonnes, despite supplies increasing to 334 million tonnes. The country is likely to have a coal demand of 1.5-2.25 billion tonnes by 2025 and it would require huge amount of imports.

Similarly, for gas, the supply of 30 million standard cubic metres per day (mmscmd) is not sufficient to meet the requirement for 9,536 mw of installed gas-based power generating capacity. Next year, the supplies are likely to remain same, while the shortfall would increase to 39.5 mmscmd as the installed capacity that could use gas is expected to go up to 13,486 mw.

To increase domestic coal availability, officials said, approval for mining plans of Coal India for 91.5 million tonnes per annum would be expedited and idle captive mining licences would be cancelled and awarded to new players.

Similarly, the import of liquefied natural gas (LNG) would be made attractive by giving customs duty exemption and relaxing the LNG shipping policy.

The possibility of transporting gas from Russia's giant Sakhalin I field in which ONGC Videsh has a 20 per cent stake, would be pursued, they said.

India will need to import about 200 million tonnes of oil (up from current 91 million tonnes), 190 million standard cubic metres per day of gas (currently 21 mmscmd) and 1 billion tonnes of coal by 2031-32.

Power minister PM Sayeed said cabinet secretary B.K. Chaturvedi made a presentation on short and medium-term measures for increasing fuel (gas and coal) supply for power, while Parikh made a presentation on integrated energy policy challenges and options.

As demand will outpace domestic supplies, increased import of oil, gas and coal are inevitable and acquisition of stakes in oil and gas fields and coal mines is an option to secure energy security for the country.

“We reviewed the present position, the likely position after the 10th plan period and the 11th plan period and beyond and policy interventions needed,” Sayeed told journalists after the two-hour long meeting.

“The meeting was about how we must have our own security of energy in the short, medium and long term,” he said.

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