NEW DELHI: India’s gas consumption is set to surge 60% to 103 billon cubic metres (bcm) by 2030, leading to more than doubling of liquefied natural gas (LNG) imports, the International Energy Agency said on Wednesday, suggesting further liberalisation of the domestic market as the world heads towards a surplus.
Noting that India is looking to increase the share of gas in its energy mix from a little over 6% to 15%, the IEA’s special report on India gas market released at the India Energy Week projected a potential for even higher growth under an accelerated scenario, where targeted policy measures could push total demand to approximately 120 bcm by 2030 – comparable to the current gas consumption of SouthAmerica.
As domestic natural gas production is projected to see only marginal growth until 2030, LNG imports are expected to meet an increasing share of India’s future gas demand. The gap between contracted LNG supply and projected LNG requirements is set to widen significantly after 2028, leaving India more exposed to the volatility of the spot LNG market unless additional LNG contracts are secured in coming years, the report said.
“The prospect of higher gas demand coincides with an expected wave of new global LNG supply. However, it will require careful planning and market coordination to ensure supply security as well as help gas to compete in a price-sensitive market,” according to Keisuke Sadamori, IEA director of energy markets and security.
City gas distribution sector is expected to lead the growth in consumption through 2030, supported by rapid expansion in CNG (compressed natural gas) infrastructure and competitive pricing against liquid fuels. Heavy industry and manufacturing sectors are expected to add around 15 bcm of demand during this period, while gas use in oil refining is forecast to increase by more than 4 bcm as more refineries connect to the network.
Demand increased by more than 10% in both 2023 and 2024, indicating an inflection point as rapid infrastructure expansion and policy support drive unprecedented growth in consumption, the report said.
Domestic gas production, which met half the demand in 2023, is projected to grow to just under 38 bcm by 2030, or about 8% above 2023 levels. Hence LNG imports will need to more than double to around 65 bcm a year by 2030 to bridge the shortfall, it said.
Looking ahead, the report emphasised the need for strategic planning in LNG procurement and import infrastructure. As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility unless new long-term contracts are secured in the coming years.