IEA RELEASES INDIA GAS MARKET REPORT: OUTLOOK TO 2030

PRELIMS BITS – REPORTS

The International Energy Agency (IEA) has published its latest report, “India Gas Market Report: Outlook to 2030”, highlighting that India’s natural gas demand is projected to grow by 60% by 2030, reaching 103 billion cubic meters (bcm) annually. This makes India one of the world’s fastest-growing gas markets. After a decade of sluggish growth, gas consumption surged by over 10% in 2023 and 2024, signaling a turning point for the industry.

Key Drivers of India’s Natural Gas Demand Growth

• Infrastructure Expansion: Significant investments in gas pipelines, CNG stations, and LNG terminals.
• Rising Domestic Production: Increased exploration and extraction efforts.
• Improved Global Market Conditions: Favorable gas supply and pricing trends.
• Industrial Demand Surge: Heavy industries, including iron, steel, and petrochemicals, are consuming an additional 15 bcm per year.

Infrastructure Development: Key Expansions by 2030

• CNG Stations: The number of CNG stations has quadrupled since 2019 and is set to double again by 2030.
• Residential Gas Connections: More than double the current figures expected by 2030.
• Gas Transmission Pipeline Network: Expanded by 40% since 2019, with an additional 50% growth projected.

Domestic Production vs. Imports

1. Domestic Gas Production

• 2023 Production: Met only 50% of national demand.
• 2030 Projection: Expected to rise to just under 38 bcm (still insufficient to meet growing demand).

2. LNG Imports

• 2030 Projection: Imports will more than double to 65 bcm annually.

Recent Trends:

• LNG imports grew by 10% in 2023 and 2024 after a decline in 2022.
• Reliance on LNG imports will increase significantly unless domestic production is boosted.

 

Global Market Impact & Supply Security

• India’s rising gas demand aligns with global LNG supply growth, but:
• Contracted LNG supply gap widens post-2028, increasing reliance on volatile spot markets.
• Policy focus needed on long-term LNG contracts to ensure supply stability.

 

Future Outlook: Policy Implications & Energy Shift

• Projected Consumption by 2030: Potentially 120 bcm annually, making India’s consumption comparable to South America’s total demand.
• Natural Gas as a Primary Energy Source: Increasing infrastructure and demand suggest a gradual transition towards gas-based energy solutions.
• Strategic Policy Interventions: Needed to boost domestic production, diversify supply chains, and ensure energy security.

The IEA report underscores India’s strategic importance in the global gas market and calls for careful planning to manage the nation’s growing dependence on natural gas.