India is preparing for a significant increase in its natural gas consumption in the coming years, as demand is expected to jump nearly 60% by 2030, according to the latest report from the Paris-based International Energy Agency (IEA). This surge in demand is expected to push the country’s liquefied natural gas (LNG) imports to more than double, as the nation seeks to meet its growing energy needs. The IEA attributes this sharp increase to both an expanding economy and the country’s efforts to transition to cleaner energy sources.
India’s natural gas consumption has been on an upward trajectory in recent years, with natural gas playing a crucial role in the country’s energy mix. By 2030, India’s gas consumption is projected to reach 103 billion cubic metres (bcm), a substantial increase from the 2023 levels. This growth is being driven by several factors, including the expanding industrial base, the need for cleaner fuels in power generation, and the adoption of gas as a cleaner alternative for transportation.
One of the primary strategies driving this shift is the increasing use of gas in the country’s power sector. India has been pushing for the higher utilisation of gas-based power plants, which can provide a cleaner source of electricity compared to coal, which is still dominant in the country. Gas-based power plants emit fewer greenhouse gases and pollutants, making them an attractive option as the country seeks to meet its climate goals and reduce air pollution.
In addition to the power sector, the adoption of LNG in heavy-duty transport is also expected to accelerate. India has started focusing on alternative fuels for its rapidly expanding transportation sector. The shift to LNG in heavy-duty trucks and buses is considered an important part of the country’s efforts to reduce its carbon emissions and improve air quality. As the country seeks to meet its infrastructure and transportation challenges, LNG is becoming a key solution to help ease the burden on conventional fuels like diesel and petrol.
To support this demand, the expansion of city gas infrastructure is being fast-tracked. India is looking to increase the availability of piped natural gas to urban households and businesses, as well as establish more refuelling stations for compressed natural gas (CNG) vehicles. The expansion of this infrastructure is seen as critical for enabling the broader adoption of natural gas in cities, which will contribute to reducing pollution in some of India’s most populated and heavily polluted regions.
The rapid rise in natural gas consumption is also expected to lead to a dramatic increase in India’s LNG imports. The IEA’s estimates suggest that LNG imports will more than double between 2023 and 2030, reaching 65 bcm per year. As domestic production of natural gas in India is projected to rise at a much slower pace, the country will be increasingly dependent on LNG imports to meet its growing energy demand.
India has already started making significant investments to secure long-term LNG supplies. The government has been negotiating long-term contracts with global LNG suppliers, including countries like Qatar, the United States, and Australia, to ensure a steady flow of LNG to meet the growing demand. In addition to this, India is exploring the possibility of building more import terminals along its coastline to further increase its import capacity.
The IEA’s report highlights that while the shift towards LNG and natural gas offers a cleaner energy future, it also comes with challenges. The rise in LNG imports will require substantial investments in infrastructure, including storage facilities, pipelines, and regasification terminals. Furthermore, India will need to manage the volatility in global LNG prices, which can impact the cost of natural gas in the domestic market.
Despite these challenges, India’s commitment to increasing its use of natural gas is clear. The shift to natural gas is part of the country’s broader strategy to diversify its energy sources and reduce its dependence on coal and oil. With continued investments in infrastructure and a focus on cleaner energy solutions, India is positioning itself for a future in which natural gas plays an increasingly important role in meeting the country’s energy needs.
India’s growing demand for natural gas is a reflection of its broader energy transition, one that will require continued efforts and investments in both infrastructure and policy. As the country works to meet its climate and economic goals, natural gas is poised to play a significant role in shaping India’s energy landscape over the next decade.
As India moves forward with its energy transition, the importance of domestic policy frameworks to support the growing natural gas demand cannot be overstated. Policymakers will need to create an environment that encourages investment in natural gas infrastructure, ensuring the timely development of necessary facilities like storage terminals, pipelines, and regasification plants. Moreover, a focus on energy security will be crucial as India continues to increase its LNG imports. To address this, the government will have to prioritize building strong relationships with LNG-producing countries to secure stable and affordable supplies.
The role of natural gas as a bridge fuel in India’s energy transition is becoming more evident as the nation seeks to decarbonize its power sector. Unlike coal, which remains a significant part of the energy mix, natural gas has a much lower carbon footprint, contributing to the country’s long-term goals of achieving net-zero emissions by 2070. The deployment of natural gas infrastructure across urban areas is expected to help mitigate the impact of growing emissions from industries and transportation, which are major contributors to India’s overall pollution levels.
One of the key drivers behind India’s push for LNG is its commitment to reducing its reliance on coal and oil for energy generation. The adoption of LNG as a cleaner energy source for industrial use, power generation, and transportation provides India with an opportunity to reduce its environmental impact while sustaining economic growth. The Indian government’s push for more renewable energy is not just about increasing green energy production but also about ensuring that natural gas fills the gap created by intermittency and unpredictability in renewable sources like solar and wind.
In parallel with expanding natural gas infrastructure, India’s energy policies will also need to focus on consumer affordability. As the cost of LNG remains subject to fluctuations in the global market, it is essential that India finds ways to mitigate the impact of rising energy prices on consumers. The government may need to introduce subsidies or price controls to ensure that gas remains affordable for both industrial users and the general public, particularly in the face of higher global prices.
India’s natural gas push also presents significant opportunities for job creation and economic growth, particularly in sectors such as infrastructure development, manufacturing, and distribution. With increased investment in LNG infrastructure and related industries, thousands of new jobs are expected to be created, contributing to India’s overall employment goals. Additionally, this sector’s growth is likely to stimulate technological innovation, with Indian companies finding new ways to enhance the efficiency of natural gas use across industries.
India’s focus on natural gas is set to play a significant role in its overall energy strategy, with natural gas complementing its growing renewable energy capacity. As the country continues to navigate its energy transition, natural gas will act as a crucial player in the move away from high-emission fossil fuels like coal and oil. India’s commitment to creating a sustainable, diversified energy mix underscores the importance of both conventional and renewable energy sources in achieving energy security and environmental sustainability.
