Indian Oil Corp (IOC), the country's biggest refiner, is expanding its natural gas business as the south Asian nation, the world's third-largest carbon emitter, aims to cut its dependence on coal and oil.
Thirteen of the world's 20 dirtiest cities are in India, with New Delhi taking top spot, a report by the World Health Organisation said last year.
As part of Prime Minister Narendra Modi's "Clean India Mission", the country last year launched an air quality index to help citizens understand complex pollution data and its implications for their health.
"Gas is certainly seen as the fuel of future with so much emphasis on environment ... we would like to play an active role in terms of providing customers with the choice of the fuel they want," B. Ashok, IOC chairman, told a news conference.
IOC is the country's biggest fuel retailer, meeting 46.7% of India's fuel demand through its 24,400 fuel stations. India, the world's fourth-biggest oil consumer, is expanding its gas import infrastructure to increase usage of the cleaner fuel and raise its share in the country's overall energy mix from the current 8%.
IOC already supplies compressed natural gas (CNG), widely used in urban public transit, through its 160 stations, Ashok said, adding the facility would be installed in fuel pumps in cities that need to use gas for public transport.
"Probably we will make sure to have provisions for CNG sales at our new retail outlets," he said. IOC aims to add about 1,000 fuel stations in the current fiscal year.
It recently made its first purchase of spot liquefied natural gas (LNG) from Excelerate Energy for delivery in June. It already markets some of the gas imported at Petronet LNG's Dahej terminal in western India.
IOC has signed a deal to buy 3 million tonnes per annum (mtpa) of gas from the planned 5-mtpa Dhamra LNG plant in the country's east coast, he said.
It has also signed a deal with Japan's Mitsubishi Corp to buy 0.7 mtpa of LNG from the Cameron LNG plant in Louisiana under a 20 year deal, with supplies beginning in early 2018 for IOC's planned 5 mtpa Ennore plant in eastern India.
IOC will also lift 1.2 mtpa LNG for 20 years from Petronas' British Columbia project in which it has a 10% stake. Deliveries under this deal are expected to begin in 2020.