India has received its very first consignment of the cheapest Liquefied Natural Gas (LNG) under a longstanding contract with Russia. The gas has been imported into the country at a price of around $7 per million British Thermal Unit (mmBtu) by the Russian supplier Gazprom. Russia is the largest crude oil and second-largest gas producer in the world.
The amount at which India has received LNG from Russia is far much cheaper ($1.5 per mmBtu cheaper) than that of Qatar, which is India’s biggest and oldest exporter of LNG. Our country is the fourth largest importer of LNG and its objective is to create a gas-based economy and bring diversification in the energy imports, which is currently intimidated by oil and coal.
The LNG cargo was received at the port in Mumbai and according to the reports, India’s Minister of Petroleum and Natural Gas, Dharmendra Pradhan, was present at the import terminal to welcome it as it was escorted from Gazprom by the state-owned gas utility GAIL India Ltd. The deal is being considered as a great achievement for the development of the country’s economy.
In this regard, Dharmendra Pradhan expressed, “To bring Russia’s Liquefied Natural Gas (LNG) in India is a big achievement in our energy roadmap. In next 20 years, $25 billion worth gas will come to India and nearly $1.5 billion worth of Liquefied natural gas (LNG) will be bought from Russia every year. It is a successful deal between India-Russia.”
India is now making huge investments in the field of LNG imports. It is constructing LNG import terminals and pipelines to ease the import and supply of the gas across the country. Our country is dependent on imports to fulfill 45 percent of its gas needs. Over the last three years, GAIL and Petronet have worked together on their deals with suppliers from the Middle-East, Russia and Australia and helped to bring in more flexibility in price and delivery of the gas.
Speaking on the occasion, Shri Pradhan said that the starting of LNG imports from Russia has added a new dimension to the Indo-Russian bilateral relations, particularly in the oil & gas sector. @PMOIndia @narendramodi @dpradhanbjp @PetroleumMin pic.twitter.com/CHi6OaduUV
— GAIL (India) Limited (@gailindia) June 4, 2018
Earlier, the Narendra Modi-led government had successfully renegotiated the price of LNG with Qatar’s RasGas and America’s Exxon Mobil Corp. India is one of the world’s largest consumer of energy and its companies are making the most of it in order to negotiate for cheaper imports. And therefore, India has been shoring up its energy partnership with Russia in the last few years. It might be interesting to watch the changes that the gas-based economy has to bring in.
What is LNG? How is it different from LPG.
– LNG or Liquified Natural Gas is a natural gas that is normally warmed to be used in heating and cooking.
– It can be utilized in electricity generation and other industrial uses. LNG can also be kept as a liquid to be used as an alternative transportation fuel.
– Natural gas is the cleanest burning fossil fuel. It produces less emissions and pollutants than either coal or oil and therefore it is more convenient to use.
– LNG is transported in double-hulled ships specifically designed to handle the low temperature of LNG. These carriers are insulated to limit the amount of LNG that boils off or evaporates.
– LNG is different from LPG. The difference between them is that their appliances operate at different pressures. LPG is denser than air whereas LNG is lighter than air.