PwC survey proves once again the importance of PPP for development of infrastructure and gas sector

PwC conducted a survey on the Indian gas sector that specifies a strong unanimity that gas storage, transmission and distribution infrastructure development will help in growing gas demand in the coming days. More than 90% of the survey respondents approved the ‘carrier first, commodity later’ principle as the method for gas sector improvement. According to the survey, the public private partnership (PPP) model has the capability to increase capital infusion in infrastructure development. More than 95% of the respondents suggested that the PPP model should be followed to attract private sector contribution and investment for the development of capital-intensive gas transmission projects which have a long gestation period. Majority of the respondents specified that the share of natural gas will be in the range of 10–15%, by 2040 while 25% agreed with International Energy Agency’s (IEA) estimate of 8%. However, stakeholders were agreed in their projection that with government intervention in terms of regulatory reforms and infrastructure development, the share could go up to 15%. About 50% of the respondents supposed that LNG holds the largest potential for meeting India’s gas supplies and believe that the time is right for investments into equity gas in view of the projection that LNG prices will remain low in the medium to long term. Deepak Mahurkar Leader Oil & Gas, PwC India believes, “The demand is here in India, and investors are keen to tap the opportunity.  With the recent favourable policy announcement the aspirations of stakeholders has shot up.” The survey also exposed that most players (82%) consider that the Indian gas market is not mature enough for the unbundling of the gas transmission and gas distribution segments. The know-hows of developed gas markets globally, and particularly in the EU, have established that for gas markets to be competitive, gas transmission and distribution segments need to be unbundled. Thus non-discriminatory access to the network and deter vertically integrated companies from taking undue advantage of their monopolistic position will be confirmed that will prevent conflicts of interest.     Source: press.pwc.com