India’s use of natural gas is expected to grow a lot in the next few years, with a nearly 60% increase by 2030. This will cause a big rise in the amount of liquefied natural gas (LNG) India imports. According to the International Energy Agency (IEA), India’s total natural gas consumption will reach 103 billion cubic meters (bcm) by 2030, which is much higher than in 2023. At the same time, India’s LNG imports will more than double, reaching 65 bcm each year by the end of the decade.

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Factors driving growth in natural gas consumption

The IEA pointed out several reasons for the increase in gas demand. The growth of city gas distribution, the needs of industries, and power generation are all expected to be major factors in driving up gas consumption. “India’s natural gas consumption is forecast to increase by nearly 60% by 2030, driven by robust growth in city gas distribution, industrial demand, and power generation… Targeted strategies and policy interventions could boost gas consumption beyond the forecasted trajectory to around 120 bcm/yr by 2030, close to the current gas consumption of the entire continent of South America,” the IEA said in its report titled India Gas Market Report: Outlook to 2030.

The IEA also suggested ways to help India reach its gas consumption goals. These include using more gas-powered power plants, using LNG more in heavy trucks and other large vehicles, and expanding the gas supply in cities. The IEA also said that if these plans are put into action, the increase in gas use could be even bigger than expected.

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India’s LNG imports to rise steadily

As India’s demand for gas increases, much of it will need to be met by importing LNG. Even though India is trying to produce more gas locally, its own production is expected to grow only a little by 2030. This means India will rely mostly on LNG imports to meet the gap between what it produces and what it needs.

The IEA said that between 2013 and 2023, India’s LNG imports grew by 70%, reaching 36 bcm in 2024. This matches the highest amount imported in 2020, making India the fourth-largest LNG importer in the world. Looking ahead, the IEA predicts that India’s LNG imports will keep increasing and reach 64 bcm per year by 2030. This growth will be an average of 11% each year from 2023 to 2030, which is double the growth rate seen in the past decade.

However, the IEA also warned that India might face problems securing enough LNG to meet its rising demand. There could be a gap between the amount of LNG India has agreed to buy and the amount it will actually need, especially after 2028. This could lead to price changes in the global LNG market unless India signs new long-term contracts. To avoid this, Indian LNG importers are already negotiating more long-term contracts for future supply.

Role of infrastructure in gas market growth

Infrastructure development is very important for the growth of India’s gas market. In recent years, India has made big improvements in its gas-related infrastructure. Since 2019, the country has almost quadrupled the number of compressed natural gas (CNG) stations and more than doubled the number of homes with gas connections. It has also expanded its natural gas pipeline network by 40%.

By 2030, India plans to make even more improvements. The number of CNG stations and gas connections for homes is expected to double, and the gas pipeline network will grow by another 50%. This will help meet the rising demand for natural gas, especially in cities.

The city gas distribution system will play a big role in increasing gas use. The fast growth of CNG stations and the lower price of gas compared to other fuels will encourage more people in cities to use natural gas. The industrial and manufacturing sectors are also expected to use more gas, adding about 15 bcm to the demand. Additionally, more gas will be used in oil refining, adding over 4 bcm as more refineries connect to the gas network.

India’s natural gas use is expected to grow a lot by 2030 because of higher demand in cities, industries, and power generation. Since local gas production won’t be enough to meet this demand, India will need to import more LNG. To make sure there’s enough supply, India needs to carefully plan its LNG purchases and improve its infrastructure. With continued investment in gas infrastructure, India is on track to become a major player in the global natural gas market. 

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