Gas policy reforms will incentivise production, draw investors: PM

New Delhi, March 23 (IANS) The government is looking at reforming its gas pricing policy to attract investors, Prime Minister Manmohan Singh said Friday, adding that remunerative prices were necessary to draw private players with expertise in the sector.

"The government has initiated gas pricing policy reforms to incentivise production of natural gas. We are conscious that remunerative energy prices are needed to ensure expanded energy supply," the Prime Minister said in his address at the 7th Asia Gas Partnership Summit here.

"At the same time oil and gas are national resources and, therefore, should be within the framework of government and regulatory oversight. The economic exploitation of these resources should lead, therefore, to win-win solutions for both the investors as well as the people," he added.

Reliance Industries will be among the major companies to benefit if gas prices are brought at part with international levels.

The Mukesh Ambani-led company has been asking the government to raise the price of gas produced from its Krishna Godavari basin, currently fixed at $4.2 per unit. Imported gas costs about four times more.

The prime minister also said that development of alternative sources of gas such as Shale gas and Coal Bed Methane were paramount to meet growing needs of the South Asian economic giant. Natural gas consumption in India in the last five years has grown at a compounded annual growth rate of 14 percent.

"The mapping of India's shale gas resources has been undertaken and we are working to put in place a regulatory regime for licensing rounds by the end of 2013. We are also harnessing coal bed methane for which four licensing rounds have been held and commercial production has commenced at Raniganj in West Bengal," said Manmohan Singh.

"As India has one of the world's largest coal reserves, we wish to work with international companies having the requisite experience and expertise for exploitation of coal seam gas," he added.