* India is investing $60 billion in gas infrastructure
* Total buys stake in Indian gas distribution company
* BP sees large reserves of natural gas in India
* India's gas demand to double by 2030 - Wood Mackenzie
(Adds details of Total deal)
By Nidhi Verma and Promit Mukherjee
NEW DELHI, Oct 14 (Reuters) - Global oil and gas majors are
looking to India, the world's third biggest oil importer, to buy
some of their excess liquefied natural gas (LNG) as the South
Asian nation improves its gas infrastructure and strives to
reduce emissions.
Spot LNG prices have more than halved since last year due to
oversupply as producers battle for market share.
The Indian market looks set to grow, however.
The country is investing $60 billion in gas infrastructure,
including setting up cross-country pipelines and LNG import
terminals to connect gas-starved regions to supply hubs.
Oil Minister Dharmendra Pradhan has said that by the end of
Prime Minister Narendra Modi's current term in 2024, India will
be ready with a cross-country natural gas grid.
"India is emerging as a major demand centre for gas. India
is going to be a very exciting market ... We see it as an
important energy market for decades to come," Peter Clarke,
senior vice president of global LNG at Exxon Mobil Corp
told Reuters at the India Energy Forum by CERA Week, on Monday.
Exxon signed a memorandum of understanding with India's
biggest state-owned oil refining company Indian Oil Corporation
Ltd on Monday to explore "new models of delivering
cost-effective natural gas in India."
"We see great potential here," Bill Davis, lead country
manager of South Asia at ExxonMobil, said in a statement.
Exxon also has a deal to supply LNG to Petronet LNG Ltd
, India's biggest gas importer, under a long-term
agreement from its Gorgon Project in Australia.
India currently consumes 166 million standard cubic metres
per day (mscmd) of gas out of which half is met through LNG
imports, according to government data.
India's current gas consumption is not a true reflection of
its demand potential as the nation lacks infrastructure to
transport gas. Most of its LNG import infrastructure is located
in the western part, leading to higher gas consumption there
compared with the rest of country.
Total SA said on Monday it was buying a 37.4%
stake in private Indian gas distribution company Adani Gas Ltd
. The French company also said it would explore
opportunities in Adani Group's LNG terminals in the east and
west coast.
"We want to bring competitive LNG to India," said Total
Chief Executive Patrick Pouyanne.
Pouyanne added that one of the reasons Total recently bought
a major LNG project offshore Mozambique was because the project
was "perfectly positioned to deliver LNG to India very
efficiently."
Total has committed to investing $600 million in India's gas
business and "there is more to come," Pouyanne said.
India's gas demand is expected to double to 75 billion cubic
metres by 2030, energy consultancy firm Wood Mackenzie said on
Monday.
LNG will account for half of this demand, or equivalent to
10% of today's global LNG market, the consultancy firm said.
Global majors are also bullish on India's domestic gas
production and hope it will complement imported LNG to meet the
growing need of cleaner fuels than coal and oil.
India allows companies to charge higher prices for natural
gas produced from difficult and challenging fields.
"I believe that there is close to 100 tcf (trillion cubic
feet) of natural gas resources yet to be found below ground here
in India," said Bob Dudley, CEO of British oil firm BP Plc
.
BP, in a tie up with Reliance Industries, is
investing $5 billion in India's east coast to produce gas
starting in April or May 2020, he said.
"That in itself can meet half of the natural gas demand out
to 2050," Dudley added, referring to India's gas reserves.
(Reporting by Promit Mukherjee; Editing by Mark Potter and Lisa
Shumaker)
BP (BP.)
