India is steadfast in its ambitious journey towards a gas-based economy, targeting an increase in natural gas's share in its primary energy mix to 15% by 2030, up from approximately 6.5% in 2024. Natural gas, recognized for its versatility, cleaner combustion, and efficiency, continues to be a strategic fuel for the nation's energy future, particularly as India pursues its net-zero emission goals by 2070.
Consumption India's natural gas market is poised for significant growth. The International Energy Agency (IEA) projects India's natural gas demand to surge by nearly 60% to reach 103 billion cubic meters (bcm) annually by 2030. The Petroleum and Natural Gas Regulatory Board (PNGRB) forecasts consumption to rise from the current 190 million standard cubic meters per day (MMSCMD) to 297 MMSCMD under a moderate growth scenario, with potential to reach 365 MMSCMD by 2030 if conditions are conducive.
• City Gas Distribution (CGD) Sector: Expected to be the anchor demand, growing 2.5 to 3.5 times by 2030. PNGRB aims for 17,000 CNG stations and 12 crore domestic pipeline connections by 2030.
• Industrial and Manufacturing Sectors: Heavy industries and manufacturing, including iron and steel production, are projected to add around 15 bcm annually to demand. Gas usage in oil refining is also expected to increase significantly as more refineries connect to the grid.
• Transport Sector: LNG is emerging as a potential game-changer for long-haul transportation, offering a cleaner alternative to diesel. Companies like THINK Gas are actively expanding LNG fueling infrastructure, with six new LNG fueling hubs planned by the end of 2025 across key freight corridors. The government is also exploring measures, including potentially supplying cheaper domestic natural gas, to revive and accelerate LNG adoption in the heavy-duty truck segment.
While India's domestic natural gas production has seen a resurgence, reaching approximately 35 bcm in 2023 (meeting about 50% of demand), it is projected to grow only moderately to just under 38 bcm by 2030. This limited growth means India's reliance on Liquefied Natural Gas (LNG) imports will continue to increase. LNG imports are projected to more than double to around 65 bcm annually by 2030 to bridge the widening demand-supply gap. India remains the fourth-largest LNG importer globally.
A strategic shift towards securing long-term LNG contracts is underway, with several deals set to come into effect. This aims to reduce exposure to the volatility of the spot LNG market, especially as the gap between contracted supply and projected demand is set to widen significantly after 2028.
Infrastructure Development Robust infrastructure expansion is critical to supporting India's gas growth story:
• LNG Import Capacity: India's LNG regasification capacity is set for a substantial increase, projected to grow by over 80% from its current 60 billion cubic meters per year to 111 billion cubic meters per year (regasified equivalent) by 2025, with further expansions planned to reach 86.9 MMTPA by 2030. Several new floating and ground-based regasification terminals are coming online across the western and southeastern coasts.
• National Gas Grid: The country is rapidly expanding its natural gas pipeline network. From approximately 21,700 km operational pipelines, an additional 10,805 km of gas pipelines are planned, aiming to complete a national gas grid of 35,750 km. This expansion, along with the implementation of a Unified Tariff mechanism and improved capacity utilization, will ensure wider and more affordable gas distribution across the nation.
The Indian government's proactive policy measures and focus on creating an enabling environment are pivotal. The "Open Policy" framework encourages market liberalization and ease of doing business in the sector. While global LNG spot prices have shown volatility, the expected wave of new global LNG liquefaction capacities in the coming years may lead to a more favorable, lower LNG price regime. This abundance could significantly benefit the price-sensitive Indian gas market, enhancing its competitiveness against alternative fuels. However, careful planning in LNG procurement and continued policy support will be essential to sustain this growth momentum.
India's journey towards a gas-based economy is a multifaceted endeavor driven by strategic policy, massive infrastructure development, and a growing demand across various sectors. The upcoming LNG India Summit will serve as a crucial platform to further "Unleash LNG Growth Drivers," foster collaborations, and navigate the evolving energy landscape to realize India's vision for a cleaner, more sustainable energy future.
