India is moving to the centre stage of global energy market and by the early 2020s it will replace Russia as the world's third largest refiner, a top official of the International Energy Agency said.
"That India is moving to the centre stage of global oil and energy markets. It is not only oil. It is coal. It is solar. It is out of the strong growth in the economy and the population growth," Dr Fatih Birol, executive director of IEA told reporters on Monday at a news conference on the sidelines of the internal oil and gas meet CERAWeek in Houstson.
Being attended by top world leaders including those from the corporate sector and oil ministers of countries like Saudi Arabia, Russia, the United Arab Emirates and Canada, the Indian delegation is led by the Union petroleum minister Dharmendra Pradhan.
Birol, who met Pradhan on the sidelines of the CERAWeek which kicked off on Monday, told reporters that the leadership of Prime Minister Narendra Modi has provided a strong impetus to Indian economy, particularly in terms of boosting oil and gas production.
Praising the plans of the Union government for development of hydrocarbon assets in the country, Birol said there is tremendous growth potential in the country and in the coming years it will be the centre stage of global energy.
Indian oil and energy sector will continue to grow, he asserted. In its annual report released during the conference, IEA said on the demand side, there is less uncertainty: growth will continue, driven mainly by Asia.
"India overtakes China as the main driver of demand growth, as was foreseen by the IEA some time ago," Birol said.
India, according to the report, is gradually becoming the focus of attention as Chinese demand growth slows.
Noting that Indian per capita oil consumption is just 1.2 barrels per year today, the report said the number is expected to reach 1.5 barrels per year by 2022. This compares to China's three barrels per capita per year today, a figure expected to be 2.5 by 2022.
Although, a direct comparison between India and China does not take into account societal and economic differences, the overall point is valid; there is clearly still plenty of growth to come from India, the report said.
Indian refineries have some of the highest utilisation rates in the world, churning out products for both domestic and export markets.
In the next five years, capacity additions totalling 860 thousand barrels per day (kb/d) will be made, but as a sign of the relative maturity of its downstream industry, all of these are expansion projects at existing refineries, it noted.
Even so, the additions will lag behind refined product demand growth as export volumes will be halved.
"By the early 2020s India will replace Russia as the world's third largest refiner.
This could explain the interest of Russian companies in the Indian downstream as Rosneft finalised the purchase of Essar Oil, India's second-largest private refiner.
"Indian Oil Company floated its 1.2 mb/d mega-refinery project in Maharashtra, but we do not assume it will be constructed and launched before 2022," it said.