India’s crude oil demand to grow by 5% per year till 2020: Study
At a time when India is trying to cut its oil import by 10%, a study by S&P Global Platts today stated that India’s crude oil demand is expected to go at a compound annual growth rate of 5% per year till 2020.
The report also forecast an 8% annual GDP growth for India over the next few years. The report states that oil products demand is expected to grow annually by 7-9% in the next five to ten years. While gas demand is likely to grow by 7%, power demand is set to zoom astronomically by 44% from 2016 levels by 2020. “To secure long-term energy and resource needs, India will need partners, it will need reliable supply chains and foreign investment,” said Sambit Mohanty, senior editor, Asia Pacific at S&P Global Platts.
As per the report, a major highlight of this growth will be the utilisation of liquefied natural gas terminal capacity, which is expected to grow from current 16 million tonne (MT) to 30 MT by 2022. The report adds that a switch in power sector policy suggests India’s coal-for-power generation expansion may start to peter out after 2022, leaving some assets stranded. Meanwhile, short-term steel demand is forecast to grow at 4.5-5.5%, accelerating to 6-6.5% by 2020-21.
India’s domestic gas production was 31.14 billion cubic meters in financial year 2015-16, down 40% from its peak of 51.23 BCM in 2010-11. The report estimates the domestic gas production could rebound and grow at 4% to 103 million metric standard cubic meter per day (mmscmd) by 2020-21, pushed by new pricing policy for deepwater and ultra-deepwater blocks and freedom in gas marketing and pricing for new production.
Platts report notes that, there is little prospect that domestic production of many primary and secondary commodities will keep pace with demand growth. “The demand potential has already led major international companies, such as Shell, BP, Rosneft, Trafigura and Saudi Aramco to either consider expansion or explore joint venture opportunities to establish presence in the country,” the report said.
Source: Business Standard