With India expected to become world's third largest energy consumer in seven years, Prime Minister Manmohan Singh on Tuesday said market-based pricing and technology are essential for meeting the nation's needs in this regard.
Speaking at the 8th Asia Gas Partnership Summit here, he said India, which currently is world's seventh largest energy producer, "needs to increase its energy supply by 3 to 4 times within next two decades."
"With oil and gas constituting around 41 % of India's primary energy consumption, India is expected to be the 3rd largest energy consumer by 2020," he said.
India is currently fourth largest energy consumer behind US, China and Japan.
To bridge the gap between supply and demand, the government is encouraging domestic and global companies to explore onshore and offshore regions, he said.
He cited the example of US shale gas revolution where technology and market-based pricing helped exploit the unconventional gas resource and turn the country into energy surplus.
"This (technology and market based pricing) is a combination that is essential to provide rapidly growing economies like ours with energy solutions commensurate with our needs," the Prime Minister said.
India is also progressively pursuing other options to achieve energy security, he said, adding one of these is the acquisition of energy assets in other countries.
India, which imports about 80 % of its oil needs and more than half of its natural gas requirement, has market based pricing for crude but sub-market rates for gas.
A new pricing regime is envisaged from April 1, 2014, which will nearly double rates to USD 8.2 to 8.4 per million British thermal unit though still lower than market price.
"I take this opportunity to assure investors of the Government's commitment to providing a stable and enabling environment for exploration of new sources of energy," Singh said.
Despite having a huge demand for natural gas, countries like India are not able to secure adequate volumes owing to differences in price expectations between buyers and sellers, Singh said.
Natural gas, he said, is the fuel of choice as it is efficient for power generation and cleaner alternative for vehicles.
"Over the years, natural gas has become increasingly important as a source of energy in our country, with the rate of growth in natural gas consumption being the highest among all commercial energy sources," he said.
"There are a variety of reasons for this including environmental concerns, the need for fuel diversification, energy prices and market deregulation."
The natural gas sector, he said, has undergone a sea change in recent years. "Rapid growth in the production of Shale gas in the United States has opened possibilities of similar success in other parts of the world.
"The technological and economic possibilities that the Shale gas revolution has opened up are likely to further change the global energy landscape in the years to come," the Prime Minister said.
Stating that there will be new producers, new consumers and new trading arrangements, he said, "We too are hopeful that we will be fortunate in discovering Shale gas reserves in our country as well."
Asia has been the driver of the global LNG demand. It accounts now for around 70 per cent of all LNG traded globally.
It is expected that Asia will continue to occupy the same share in global LNG demand despite its growth being projected to go up by 2 to 3 times the current levels by the year 2020.
Singh said there are exciting opportunities in India for partnerships through joint investments in areas like gas pipeline development, LNG terminals, Petrochemicals, gas trading hubs and city gas distribution.