In the midst of the government’s push to diversify the energy mix, Atmos, a joint venture between state-owned Gazprom and Indian Oil Corp, is looking to build a natural gas trading and logistics hub in India.
The government’s decision to buy gas from Atmos in a deal worth $400 million has come as a huge surprise to some analysts, who had anticipated a gas hub being built in the country.
Atmos was already in the running to supply gas to two state-run energy projects, the Maharashtra state-led gas plant and the Chhattisgarh-Ganga basin gas project.
“It’s a very positive development for the industry in the sense that we are now getting more competitive gas prices,” Atmos managing director Manish Shah told The Hindu on Thursday.
He said the company expects the price of natural gas to rise in the coming months.
“We are going to build the infrastructure for natural-gas trading and a logistics hub for gas deliveries to India.
It’s a big project and it is a huge undertaking,” he said.
According to Shah, Atmas will help the company diversify its business.
“For our domestic customers, it will enable us to deliver more gas to them at a lower cost, and for our foreign customers, the price will also be lower,” he added.
Gas from the Atmos project will be routed to India’s eastern states of Bihar and Jharkhand, which are part of the Chhatisgarhwad-Gangotri basin.
In 2019, the project is expected to provide gas to over 4,000 households in the region, which is one of the largest gas-consuming states in the world.
The gas is also expected to help the Atmas project meet the needs of its growing middle class, said Shah.
“The gas will be delivered through pipelines in Chhattasgarh and Ganga basin and will be exported to Europe, Asia and Africa,” he explained.
The company’s next phase is to build infrastructure for liquefied natural gas (LNG) exports, which will help reduce the need for import.
In 2018, the Atos project supplied around 4,200 million cubic metres of LNG, while the Ganga project supplied 5.4 million cubic meters of gas.
In the next three years, the company plans to export 4.4 billion cubic metres, with a target of 5 billion cubic meters by 2020.
“We are building infrastructure for LNG export and logistics for gas to Europe and Asia.
This is part of our long-term vision,” Shah added.
According a statement by the company, Atos gas trading will provide a way for the gas industry to diversified its revenue stream, thereby creating jobs in the fields.
“This project is a game changer for the energy sector in India,” said Anil Kaul, CEO, Gas Industry Association of India (GIA), which represents major gas importers.
“Atmos has the potential to help build India’s liquefiering sector.
This will help create jobs and boost India’s GDP by more than 5% in the next decade,” Kaul added.