Energy security: India, Africa to forge supply chain partnership in hydrocarbons

Unveiling the contours of a win-win energy partnership between India and the resource-rich African continent, External Affairs Minister Sushma Swaraj has raised the bar by proposing proactive India-Africa collaboration in forging an entire supply chain in the hydrocarbon sector beginning from exploration to strategic storage.

“India can partner in establishing the entire supply chain in the hydrocarbon sector beginning from exploration, production, refining, distribution, infrastructure and strategic storage,” Mrs Swaraj said at the 4^th edition of the India-Africa Hydrocarbon Conference in New Delhi on January 22.

“Africa, for us, is a natural partner with its rich resource endowments and rising production of hydrocarbons. This is an opportunity for both India and Africa to forge a commitment to energy security both security of demand and security of supply. Our complementarity is a win-win proposition which cannot be ignored by either one of us,” said the minister in presence of ministers and officials from 21 African countries.

Pushing the envelope for in India-Africa development partnership at the third India-Africa Forum Summit in October 2015, India had pledged concessional credit of $10 billion to Africa over the next five years as well as grant of $600 million.

“This Conference has been organised not long after we held the highly successful Third India-Africa Forum Summit in New Delhi in October last year. This shows our continuous interest in strengthening our partnership with Africa in a wide range of areas,” Mrs Swaraj said.

Africa crucial to India’s energy security

Africa, which currently accounts for 15-20 per cent of India’s total imports, is set to play a bigger role in energy security of Asia’s third largest economy. The number of African countries that have proven reserves of oil or gas has increased from seven in 1990 to 25 in 2015. India imports 76 per cent of its crude oil needs, which is estimated to reach 90 per cent by 2030. The country also imports 37 per cent of its gas requirement.

“Over the recent years, India has moved to diversify its sources of oil supply and Africa has emerged as an important supplier for India. Approximately 16% of our oil import in the last year was sourced from Africa, and Nigeria rose to the top among our oil suppliers during some periods. This is a very significant development in our energy relationship,” Mrs Swaraj said.

Petroleum Minister Dharmendra Pradhan said that as many as 21 countries participated in this conference. This indicates the interest of African nations, he added.

In the coming years, Africa’s contribution in meeting LNG requirements of India is set to increase. “In 2015, our imports of LNG from Africa doubled compared to 2013. The role of Africa in meeting India’s LNG needs will also keep growing as more LNG projects are brought online in the coming years,” she added.

India is expected to send delegations to these African nations to explore the possibility of partnerships in energy sector in 2016, said Mr Pradhan. He said that there are African nations wanting to upgrade their refining capacities with changing times and India can play an important role. These countries can also benefit from India’s model system for distribution of clean fuels like LPG in the country, Mr Pradhan added.

Green Energy

Moving beyond hydrocarbons, India and Africa are also set to step up cooperation in renewables and green energy. In this context, Mrs Swaraj urged the African nations not to limit energy cooperation to hydrocarbons alone, but to also expand it to clean sources like solar, wind and biofuels where India has progressed. African countries are set to play an important role in International Solar Alliance, a pet project of Prime Minister Narendra Modi, which was formally launched in Paris in November last year.

Author Profile

India Writes Network: India Writes Network (www.indiawrites.org) is an emerging think tank and a media-publishing company focused on international affairs & the India Story. Centre for Global India Insights is the research arm of India Writes Network. To subscribe to India and the World, write to editor@indiawrites.org. A venture of TGII Media Private Limited, a leading media, publishing and consultancy company, IWN has carved a niche for balanced and exhaustive reporting and analysis of international affairs. Eminent personalities, politicians, diplomats, authors, strategy gurus and news-makers have contributed to India Writes Network, as also “India and the World,” a magazine focused on global affairs.