India's natural gas consumption is poised for significant growth, nearly doubling from 65 billion cubic meters (bcm) in 2023 to 113.7 bcm by 2040, according to research from Rystad Energy.
The research said the surge is fueled by rapid population growth, economic expansion and the country's shift towards cleaner energy sources.
However, despite a 51% increase in domestic gas production to 36.7 bcm by 2025, India is forecast to heavily rely on imports to meet its growing energy needs.
To address this dependency, India signed long-term supply contracts that extend well into the 2030s, securing its energy trade and protecting the nation from global price volatility and supply chain disruptions, the research showed.
'By securing these agreements, the country not only enhances its energy security but also strengthens its position in the global liquified natural gas (LNG) market, advancing its shift toward a cleaner energy mix,' it said.
- Coal and renewables remain dominant
Despite the growing demand for natural gas, it currently accounts for just 2% of India's power generation, with coal and renewables playing much larger roles.
'While gas-for-power isn't expected to be a major driver for gas demand, the sector could still see growth, however, depending on future policies to promote coal-to-gas switching or introduce carbon pricing,' Rystad said.
According to Rystad, India's LNG sector continues to grow and future opportunities lie in strengthening ties with the Middle East, a key LNG supplier due to its geographical proximity and significant uncontracted production.
It noted that nearly 100 million tonnes per annum of Middle Eastern LNG remains uncontracted by 2035, positioning India to negotiate favorable deals and secure long-term supplies to fuel its growing economy.
- Demand growth driven by key sectors
Several sectors are expected to drive India's future gas demand, including city gas distribution networks and key industries like fertilizers, refining and petrochemicals.
Urea production, in particular, is a heavy consumer of natural gas. Following the successful restart of four gas-based fertilizer plants in 2021 and 2022, India's urea production reached 30 million tonnes in 2023, but with annual demand standing at 35 million tonnes, further growth is expected.
India's refining sector could also increase capacity to around 335 million tonnes per annum by 2030, with expansions likely near LNG terminals to support rising demand for petrochemicals.
Meanwhile, the city gas distribution sector is expanding rapidly, with compressed natural gas (CNG) stations and piped natural gas networks driving natural gas use across transportation, industrial and domestic applications.
By April 2023, the number of CNG stations had grown fivefold to 5,710, while pipeline connections had quadrupled to 12 million.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr