NEW DELHI: Indian Prime Minister Manmohan Singh promised investors Tuesday that the government will provide a “stable and enabling environment” for exploration of new sources of fuel for the energy-hungry nation.

India, which imports about 80 per cent of its oil needs and more than half of its natural gas requirements, is expected to be the third-largest energy consumer by 2020, Singh told a gas energy conference in New Delhi.

To meet India's energy needs to power its large economy, the government is encouraging domestic and global companies to explore onshore and offshore regions, Singh said.

“I take this opportunity to assure investors of our government's commitment to providing a stable and enabling policy environment for exploration of new sources of energy,” he said.

India's government has made energy security one of its national priorities. But regulatory uncertainties, delays in clearances, and lack of infrastructure have held back investors.

Some global energy companies, deterred by red tape, have reduced their presence in India.

India, currently the world's seventh largest energy producer, “needs to increase its energy supply by three-to-four times within the next two decades,” Singh said.

India, with its population of 1.2 billion, is beset by energy shortages that make power cuts widespread and hobble industrial growth. It is currently the fourth-largest energy consumer behind United States, China and Japan, he said.

“There are exciting opportunities in India for partnerships for joint investments in areas like gas pipeline development, LNG terminals, petrochemicals, gas trading hubs and city gas distribution,” Singh said.

Separately, India called on the biggest Asian gas buyers to band together as a block to win price discounts from suppliers.

Although Asia drives most of the growth in natural-gas demand, energy suppliers sell fuel to the region at a higher rate than to the so-called premium markets of Europe, oil minister M. Veerappa Moily told the same conference.

lndia, China, Japan and Korea, which are among the leading energy consumers, “can forge a alliance to get favourable pricing from natural gas suppliers in the Gulf and elsewhere,” Moily said.

“Prices offered by the same seller to Europe and Asia vary greatly, beyond business considerations,” he said.

One of the reasons for what Moily called the “Asian premium” in prices could be that Asian markets lack a platform to transparently trade natural gas or liquefied natural gas (LNG).

Asian buyers, he said, “will have to emerge united in their approach. Large Asian buyers coming together may negotiate from a position of strength,” he said.

Moily also saw scope for integrating energy assets amongst India's neighbours – Sri Lanka, Pakistan, Myanmar, Bhutan and Bangladesh.

“Such cooperation will not only enhance competitiveness but will also improve relationships in the region,” he said.