By Nidhi Verma
NEW DELHI (Reuters) - India has approved funding of 55.6 billion rupees ($774 million) for a natural gas pipeline in its northeast, Oil Minister Dharmendra Pradhan said on Wednesday, as part of a national gas grid being built to span remote locations.
India aims to spend up to $60 billion by 2024 to set up the grid and several terminals for liquefied natural gas, as it scrambles to meet Prime Minister Narendra Modi's 2030 target of a 15% share for natural gas in the energy mix, up from 6.5% now.
The 1,656-km (1,029-mile) pipeline will cost up to 92.65 billion rupees to build.
"The government will provide 60% viability gap funding of the project cost," Pradhan told a conference in the capital, New Delhi, adding, "It will be 5,559 crores," or the equivalent of 55.6 billion rupees.
The gas grid linking eight states in a region bordering Bangladesh, Bhutan, China and Myanmar, is expected to be complete by 2023.
Despite the plan, the growth of gas consumption eased to 2.5% in fiscal 2018/19 from 11% in 2009/10, mainly because of a lack of infrastructure.
"India is ready to face challenges from the current geopolitical issues in the Middle East," Pradhan said, referring to the escalation of tension between the United States and Iran.
Iranian forces fired missiles at military bases housing U.S. troops in Iraq on Wednesday in retaliation for the U.S. killing of an Iranian general, raising concerns of a wider war in the Middle East.
The Middle East accounts for about two-thirds of India's annual imports of crude, and Iraq is its top oil supplier.
"India's foreign ministry has already spoken to oil producing nations (on the potential threat to supplies)," Pradhan said, without elaborating.
(Reporting by Nidhi Verma, Writing by Promit Mukherjee; Editing by Jason Neely and Clarence Fernandez)