In a move to pre-empt future jolts in gas supplies, the petroleum ministry has started consultations with various stakeholders as it seeks to build India’s first strategic gas reserve.

The Russia-Ukraine war had spiked LNG prices and resulted in global supply chain disruptions.

Officials said state-owned ONGC and GAIL are expected to hold equal stakes in the venture that will create the gas reserves, which will be modelled on the strategic reserves for crude oil that have been around for years.

Initially, the Centre intends to create a gas reserve with a capacity of 7-8 MMSCMD. The idea behind the reserve is to provide price stability for heavy vehicles in the country that use LNG as fuel.

The plan for a strategic gas reserve was first considered in 2021 but was shelved for the time being as India had assured supplies. However, the government has revived the plan, amid a global energy crisis triggered by the Russia-Ukraine conflict that had sent fuel prices soaring.

Officials said existing liquefied natural gas (LNG) tunnels and exhausted oil wells are likely to be utilised for the gas reserve, along with the construction of new underground infrastructure such as large salt caverns. The storage facilities may be chosen close to the pipeline infrastructure so that the fuel can be easily transported in times of need.

India is the fourth-largest LNG importer in the world, and firms have long-term LNG contracts amounting to 22 million tonnes per annum.

The strategic reserve will be in line with the strategic petroleum reserves. India has 5.33 million tonnes of underground strategic oil reserve facilities at Visakhapatnam, Mangalore and Padur. India had said it could release stock from the emergency reserves if required in the wake of the Ukraine crisis.

The plan for strategic gas reserve emerges from an official study that suggests that consumption of natural gas would grow two-fold by 2030, resulting in a large gap between demand and domestic production.

At present, almost half of the domestic consumption of natural gas is met from imports. With the government keen on building a cleaner gas-based economy, consumption is set to rise, pushing up imports of LNG.