New Delhi, March 22 (IANS): State-run oil and gas companies are planning to create a venture capital fund to encourage start-ups to develop new business models and infuse innovation into India's hydrocarbons sector, Petroleum Minister Dharmendra Pradhan said on Tuesday.

"PSUs (public sector undertakings), in consultations with the petroleum ministry, are planning the creation of a start-up fund for the oil and gas industry," Pradhan said at the Indian Oil Corp's second gas conclave here.

Making the case for start-ups in the hydrocarbons sector, he cited the example of the telecom sector and of industrialists like Ratan Tata who are investing in new enterprises.

Speaking to reporters later, Pradhan said the time had come to change the marketing strategy from liquid fuels to gas and encourage new business models in the sector to promote innovation and create infrastructure.

"PSUs are working on setting up a venture capital fund to encourage start-ups to develop new business models, marketing plan, technology and innovation into hydrocarbons. They should invest and join as partners for start-ups," he said.

"Indian intellectual capacity is contributing immensely to the global oil and gas economy. We would like the Indian energy market too to benefit from that capacity.

"Any start-up needing hand-holding can seek support from the fund. Public sector companies will independently evaluate the commercial viability of the project and take a decision on their equity participation," he added.

Pradhan said his ministry has advised public sector oil and gas companies to create a corpus that would be utilised to invest in new businesses with an innovative business model and bring efficiency.

Declaring that use of natural gas would contribute towards half of realising the target set by Prime Minister Narendra Modi of reducing oil imports by 10 percent by 2022, Pradhan said replacing oil by gas in this manner would contribute much towards India meeting its carbon emission commitments under COP 21.

"Gas is the future of the Indian economy," he said, noting that in a state like Gujarat, which has been focusing on renewable energy, gas accounts for a quarter of the state's energy basket.

"Small industry in Gujarat is supplied with domestic gas. We want to enhance our alternative energy basket, and it won't take much time for the gas market and prices to stabilise," he added.

In this connection, Pradhan informed the audience that the Petroleum and Natural Gas Regulatory Board will on Wednesday open the bids received for building a new gas pipeline on the east coast running from Contai in West Bengal via Dattapulia to Paradip on Odisha's coast.