Malcolm Brinded, group managing director of the Shell Group of Companies, said gas will replace oil as the major fuel in the next 25 years.
He was speaking at the unveiling of the company's LNG terminal at Hazira, near Surat, on Friday.
He said, with demand for liquefied natural gas expected to go up by 500 per cent over the next 30 years, Shell is taking steps to ensure that this fuel is made available to consumers at an affordable price.
With an estimated investment of Rs 3000 crore (Rs billion), the Shell Hazira project is among the largest greenfield foreign direct investments in the energy sector in India.
Upon completion, the LNG terminal will have a capacity of 2.50 million metric tonne per annum, which can be upgraded to five mmtpa and subsequently to 10 mmtpa, Brinded said.
"However, we will embark on these expansion plans only after gauging the market. Unless we have demonstrative proof of increased demand, the expansion will not be undertaken," he added.
More than half of the project work at the terminal has already been completed and the terminal will be commissioned by the third quarter of next year. Commercial operations are expected to begin by the fourth quarter.
Stating that the terminal at Hazira was an indicator of the company's confidence in the Indian economy and government, Brinded assured that LNG will be made available at affordable and commercially viable prices.
Declining to specify at what price LNG will be distributed, the group managing director said: "Prices will be fixed on an individual basis, with the contract term and volumes being the main consideration," he said.
Asked from where the gas will be sourced, Brinded said the company will adopt a portfolio approach in sourcing gas to the Hazira terminal.
He added that Shell gas fields at Oman, Nigeria, Malaysia, Australia and Russia will be the likely sources for the gas. Asked if Shell has already signed any gas contracts, company officials said no contract has been signed as yet.
Port development is not one of Shell's core strengths and the company is looking for partners for completing the project, "but they must bring value, not just money," a Shell official said.
Commenting on the increasing demand of gas as a source of energy, Malcolm Brinded said, while the global demand for energy is expected to double of even treble over the next three decades, emerging nations like India and China will be the powerhouses of economic growth.
