The additional capacity is going to come in the form of a new 9 MT refinery at Barmer in Rajasthan and expansion projects at Koyali in Gujarat, Panipat in Haryana, Paradip in Odisha, Vizag in Andhra Pradesh, Mumbai, Bina in Madhya Pradesh, Numaligarh in Assam and Chennai.
On the oil and gas sector, the minister said that India has seen tremendous transformation over the last six years on the back of pro-investment policies. “The sector is undergoing tremendous growth, be it in refineries, pipelines, gas terminals, storage capacity, gas cylinders, retail outlets, and all these require a large amount of steel. Oil and gas sector
is one of the largest end users of steel pipes and tubes, with pipeline being the major mode of transport for petroleum, oil and lubricant products,” he said. The minister expects expansion of the city gas distribution network that will cover 70 per cent of the country’s population, refining capacity augmentation, plan to set up 10,000 compressed natural gas stations and rise in exploration and production activities will drive steel demand in the sector in coming years.
Pradhan, however, said the steel industry should ensure cost-competitiveness. Domestic players should rise to the occasion so that cost does not escalate in an effort to promote localisation of supply chain, he added while addressing steel producers and representatives from the oil and gas sector.
The minister said the domestic manufacturers had all the capabilities to cater to the future requirements for steel in the oil and gas sector.
Though one of the largest end users, the oil and gas sector imports a significant part of its requirement.
Officials representing the buyers' side cited limited product range and price differential as the major challenges.
Indian Oil Corporation chairman Sanjiv Singh, in his presentation, pointed out that approved HR coil manufacturers in India were limited and it was similar for plates for API 5L. Also pipe manufacturers preferred imported raw materials to meet project delivery timeline, quality requirement, thickness limitations and capacity constraint. However, steel producers said that the industry had the capabilities to meet the requirement of the sector.
Jayant Acharya, director - commercial & marketing, JSW Steel, said India had all the necessary steel making and pipe making capabilities to meet the requirement of the sector.
T V Narendran, managing director and CEO, Tata Steel, said it was in mutual interest to develop a spirit of partnership and collaboration in the context of government's appeal to industry become Atmanirbhar and localise.
According to government estimates, India's energy consumption is projected to grow at 4.2 per cent per annum up to 2035. In terms of demand of petroleum products too, from 213 MTPA in 2018-19, consumption is expected to touch 458 MT by 2040, based on an estimate by the International Energy Agency. Based on an estimate by the Organization of the Petroleum Exporting Countries (OPEC), India’s crude oil demand to rise by 5.8 million barrels per day (bpd) by 2040, which will be 40 per cent of the incremental demand globally and the main reason for rising interest by global players in India.