India Seen Emulating China Growth in LNG Use to Fight Pollution

(Bloomberg) -- China's dramatic increase in liquefied natural gas imports over the past two years may have hogged the headlines, but India may well emulate its neighbor in switching to the cleanest and fastest-growing fossil fuel.

As China's shift to natural gas from dirtier burning fuels such as coal and fuel oil helps improve air quality, Indian cities are rising in pollution rankings. That may increase pressure on lawmakers in India to boost imports of LNG or face “civil unrest,” Paul Wogan, chief executive officer of LNG ship owner and operator GasLog Ltd., said Wednesday at an industry conference in London.

“It used to be if you look at the 50 most polluted cities in the world, 30 of them would be in China,” he said. “If you now look at the 50 most polluted cities in the world, most of them are in India, and the Indian government are looking at this in the same way that China did.”

China surprised the industry with the strength of a government-led push to convert to natural gas, which led to a doubling of LNG imports over the past two years. The nation may be a “big part of the solution of absorbing new LNG” as production plants from the U.S. to Australia ramp up next year, Pat Roberts, managing director of LNG-Worldwide Ltd., said in an emailed report.

To read more on the challenges facing India's natural gas drive, click here.

India's natural gas demand is seen rising 4.9 percent annually to 2040, outpacing growth of 4.7 percent in China, according to the International Energy Agency. The Indian government is keen to boost the use of gas to combat air pollution and is promoting the expansion of gas infrastructure, including four additional LNG receiving terminals under construction.

“You think about China's growth and the growth driven by the cleaning of the air. What are other major economies around the world that are in a similar position?” Iain Ross, CEO of Golar LNG Ltd., which operates LNG vessels, floating import terminals and production units, said at Wednesday's conference. “The next on policy could be India, in terms of legislatively just deciding to do something.”

To contact the reporter on this story: Anna Shiryaevskaya in London at ashiryaevska@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Rob Verdonck, Lars Paulsson

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