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The government has projected that imports of natural gas will amount to 20 million tonne of oil equivalent of gas by 2011.
This is because the Planning Commission does not expect transnational pipeline projects like the Iran-India-Pakistan pipeline and the Turkmenistan-Afghanistan-Pakistan-India pipeline to materialise during the period.
"The scope of transnational gas pipelines needs to be explored from a long-term perspective, but no pipelines are likely to be available for the projected level of gas imports during the period," the draft said.
At present, India has two functional liquefied natural gas (LNG) terminals, operated by Petronet and Shell at Dahej (5 million tonne per annum capacity) and Hazira (2.5 mmtpa), respectively.
In addition, the Ratnagiri LNG terminal is expected to go on-stream by March 2007. Petronet has come out with tenders for chartering LNG carriers for its Kochi terminal with an installed capacity of 5 million tonne per annum.
The draft approach paper said the expansion of Petronet's existing terminals might also be required. While Petronet had provisioned for expanding its Dahej terminal by another 5 mmtpa, the terminal was operating at half its present capacity. Even Shell proposes to double its capacity at Hazira, provided demand picks up.
On oil pricing, the approach paper said the only viable policy to follow was to rationalise the tax burden on oil products over time. It suggested further Customs duty cuts on petroleum products like petrol and diesel, bringing it down to 5 per cent.
Recently, Customs duty was cut to 7.5 per cent for both petrol and diesel. "There is a need to equate the duty on petroleum products to the duty on crude," the paper stated.
The draft also pointed out that while oil consumption was half the target set in the 10th Plan, it was expected to go up to 145 million tonne from 113 million tonne in 2004-05.
