The demand for energy in India would grow at more than 6 per cent per annum, Chairman of Shell group of companies in India Vikram Singh Mehta said on Monday.

The demand for gas would grow at a faster rate than for any other energy source, he added.

"This is based on the fact that the fundamentals of the Indian economy are solid. The economy has been growing between 5.5-6 per cent per annum, inflation is under control, interest rates are low, the rupee is appreciating, foreign exchange reserves are huge, there is tangible evidence of investment in physical infrastructure like roads and ports and the power sector is being restructured through the Electricity Act," Mehta told Business Standard.

He said the growth in demand for energy would be on a 1:1 parity with the growth rate of gross domestic product.

Historically, the growth in energy demand has been higher than the GDP growth rate.

"Factor in conservation of energy and improved energy usage, one can easily predict that the demand for energy will grow at the same rate as GDP," Mehta said.

In such a scenario, according to Mehta, within the energy basket, the growth in demand for gas will be higher than that for any other energy source.

"This is the reason why there is going to be an increasing demand for both domestic and imported gas in the country," he argued.

Regarding the future of liquefied natural gas import terminals in the country, Mehta said the two terminals at Dahej and Hazira should be commissioned in 2004.

Moreover, once the legal issues surrounding Dabhol were resolved, the unfinished LNG terminal at Dabhol might also get completed, he added.

"My view is that this is the limit to the number of LNG terminals that will be built in the short and medium term on the west coast. It is possible that one more terminal could come up on the east coast. But that will depend on the nature and extent of domestic discovery of gas in the Krishna-Godavari basin," he said.

Mehta said Shell, which is setting up the Hazira LNG terminal, would sell its gas at a "competitive price and meet the requirement of the customer regarding supply security."

Shell, which is the largest private energy company in India, had a long-term commitment to this country, its chairman said. It has eight registered companies here with a committed investment of over $800 million.

The company's regassification plant in India is the first such plant built by the company anywhere in the world.