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World power large Shell will foray into retailing LNG for long-haul transportation like vans, with its first filling station developing in Gujarat this yr because it bets large on the Indian fuel market, a senior firm official mentioned.
Shell operates a 5 million tonnes a yr liquefied pure fuel (LNG) import facility at Hazira in Gujarat and has a small community of petrol pumps. It’s now wanting on the LNG for vans/buses market as a development avenue.
“We need to develop our personal LNG websites and retail stations within the nation,” Nakul Raheja, nation head of Shell Power India, advised PTI.
“So we’re working now on our personal enlargement plans on this place and if issues go to plan, then inside this calendar yr we should always have our first website prepared promoting LNG as a transport gasoline to heavy responsibility automobiles within the state of Gujarat and we’re going to observe that up with a number of extra websites subsequent yr,” he added.
Whereas the primary website is prone to be an unique LNG retail outlet, the corporate could sooner or later look to co-locate the LNG refuelling facility inside petrol pumps.
“We’re beginning off with Gujarat within the neighborhood of Hazira. In fact, as a really pure place to first begin with round Surat after which logically broaden, , additional into Western India to start with after which engaged on plans past that,” he mentioned, including the corporate could have three-four websites in subsequent 12 to 18 months.
The federal government is pushing using LNG as gasoline for long-haul transportation. It’s focusing on 50 stations in Gujarat, Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Rajasthan in subsequent three years and in the end 1,000 shops.
LNG, which is pure fuel super-cooled to liquid type, has a lot much less carbon footprint than diesel. Moreover environmental advantages, it is usually cheaper on long-haul routes.
China consumes 12 to 13 million tonnes of LNG on this phase yearly. That is half of all LNG that India imports to be used in energy crops, fertilizer models, metropolis fuel and different industries.
“I have a look at India as being one of many few markets around the globe the place truly we will replicate the type of dimension and scale that China has achieved. In fact, this takes time as a result of it’s a must to begin aspect by aspect, truck by truck, fleet by fleet, buyer by buyer.
“However should you type of quick ahead 10 or 15 years, you may completely get this to change into very materials. Probably, double digit million tonnes of LNG by that time-frame,” he mentioned.
Shell would be the first non-public agency to foray into LNG retailing for long-haul transport. As of now, state-owned oil giants Indian Oil Company (20 stations), Hindustan Petroleum Company Ltd and Bharat Petroleum Company (11 stations every), GAIL India (six stations) and Petronet LNG (two stations) have introduced LNG stations.
LNG for long-haul transportation is a part of the federal government’s plan to lift the share of pure fuel within the main power basket to fifteen per cent by 2030 from the present 6.7 per cent.
Raheja mentioned to succeed in 15 per cent share, fuel consumption has to develop to 500 million commonplace cubic metres per day from present 161 mmscmd.
With home manufacturing of fuel barely assembly half of the present consumption, import of fuel within the type of LNG must develop.
“We’re projecting India to be one of many quickest rising markets for LNG on this planet. We’re seeing almost 35 to 40 million tonnes of LNG demand development in India alone within the interval between 2020 to 2040,” he mentioned.
Requested about enlargement plans for Hazira, he mentioned there may be room to broaden the capability relying on market development.
“However once more we take into consideration enlargement in a really linear sense. After we purchased out Complete’s (26 per cent) stake at Hazira (LNG terminal) about three years in the past, one of many first funding choices we made was to arrange a truck loading unit at Hazira. That has now been operational for greater than a yr and that has already added extra capability,” he mentioned.
For the share of pure fuel in India’s power basket to develop, the tempo of rollout of trunk pipeline infrastructure should proceed and the fuel should be included in GST.
“We have to proceed to deliver new markets into the fold that features inter-state transmission, and in addition doubtlessly intra state transmission infrastructure,” he mentioned, including town fuel distribution community ought to proceed to develop as it’s going to gasoline alternative of liquid auto fuels with fuel (CNG) and piped cooking fuel to family kitchens and industries.
“I believe there may be additionally a scope for us to type of create a little bit of a nationwide stage power highway map as a complete as a result of we’re speaking about inexperienced hydrogen, we’re speaking about ammonia, we’re speaking about fuel, we’re speaking about coal, we’re speaking about variety of power sources and every of them type of goes to be on their very own journey by means of this power transition, bringing all of it collectively to then say that, OK, that is the function that fuel will play in these completely different segments.
“Once more, helps create the boldness for numerous trade sector individuals to make these long run commitments,” he mentioned.
Pure fuel, similar to petrol, diesel, ATF and crude oil, is out of the purview of the Items and Providers Tax (GST), which implies tax paid on inputs can’t be set off with that on output.
Raheja mentioned fuel is at an obstacle to coal and this creates synthetic boundaries.
“You’ll be able to’t create a credit score for the tax you pay on fuel right this moment for, for instance, all of which is type of fully avoidable. So bringing it below the ambit of GST will make, I believe, a giant distinction in using fuel within the nation.”
Bringing fuel below GST may even make it reasonably priced.
“It should additionally make it extra tradable throughout states and so forth. And it’ll simply make the benefit of doing enterprise additionally on this house so much simpler,” he famous.
“India is an extremely thrilling power market. We now have for the final twenty years performed an necessary function within the fuel market, within the LNG market within the nation and we definitely wish to develop together with it.
“In order the necessity and demand for fuel grows, we wish to play our function in it. So whether or not it is creating extra provide infrastructure, whether or not it is offering LNG as a transport gasoline, all of these areas are definitely of our curiosity,” Raheja added.
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