NEW DELHI: India's energy trade with the US is likely to jump by over 40 per cent to USD 10 billion in 2019-20, as the world's third-largest oil consumer seeks to move away from its traditional suppliers in the Middle East, Oil Minister Dharmendra Pradhan said on Monday.
Mounting geopolitical uncertainties, rising US oil and gas production, and India's insatiable energy appetite has created both the need and the opportunity for the two nations to lift bilateral energy ties to a new level.
India in October 2017 began importing crude oil from the US and in March 2018 it got the first shipment of liquefied natural gas (LNG) from there.
In the last one year, the import of US crude oil has doubled and New Delhi is now closing on the biggest long-term LNG import deal.
"In 2018-19, total import of crude oil, LNG and cooking coal stood at USD 7.2 billion. In the current fiscal year 2019-20, this may go up to USD 10 billion," Pradhan said at US-India Strategic Partnership Forum's Annual Leadership Summit here.
In a short period, the US has become one of the top 10 sources of crude oil for India and also an important source for LNG. For the US, India is now the fourth-largest importer of crude oil and the third-largest for LNG.
"Indian companies already invested in oil and gas assets in the US, and I see a growing interest among our companies to invest in gas assets in the US. In fact, the energy pillar has become an important component of the bilateral strategic partnership," he said.
While India sources about 65 per cent of its crude oil needs from the volatile the Middle East region, imports from the US have doubled to over 13 million tonnes this year.
Pradhan said the rising US shale oil and gas production has had a calming effect on global energy prices.
US shale oil and gas production has brought "reasonable balance in the global energy market" with its availability countering any volatility in the Middle East, he said, wondering what impact would have been there on the energy prices in the aftermath of attacks on Saudi oil facilities and Iranian vessel a few weeks back.
Oil prices temporarily shot up in the aftermath of the attacks but are back to the previous levels as no consumer felt any major supply disruption anywhere in the world.
To a question on biofuels, the minister said India's energy profile largely centres around two major sources -- coal (58 per cent) and hydrocarbons (35 per cent).
At a brisk 5 per cent annual growth in energy consumption, India's import dependence remains high - 22 per cent for coal, 83 per cent for crude oil and 45 per cent for gas.
"It is therefore imperative that India looks for alternate sources of energy to improve energy self-sufficiency while pursuing a green path to progress.
Biofuels have the potential to significantly contribute towards attaining these goals," he said, adding blending of ethanol extracted from sugarcane in petrol has increased from less than one per cent in 2014 to 6 per cent now.
"We are targeting 20 per cent blending of ethanol in petrol and 5 per cent blending of biodiesel in diesel by 2030," he said.
Also, the government is encouraging production compressed biogas from biomass waste.
"We have made a target to set up 5,000 compressed biogas plants in different parts of the country," he said, adding these alternate forms of energy will replace hydrocarbon and reduce import dependence.
On raising the share of natural gas the country's energy basket from 6 per cent to 15 per cent by 2030, the minister said an estimated USD 60 billion is being invested in building gas pipelines, LNG import terminals and city gas infrastructure.
India's current natural gas consumption of around 150 million standard cubic meters per day is expected to rise to 215 mmscmd in the next decade. Imported liquefied natural gas (LNG) is expected to account for half of this demand.
LNG imports from the US are increasing progressively ever since shipments started in March 2018.
Indian companies are lifting at least USD 2 billion worth of LNG per annum from the Sabine Pass and Dominion Cove point terminal near Houston for the next decade, Pradhan said, adding recently Petronet LNG Ltd has announced its plans to invest with Tellurian in development of LNG infrastructure in the US and also source its equity gas for India's domestic needs.