India's natural gas consumption is forecasted to increase by 60% reaching 103 billion cubic metres (bcm)/year by 2030, according to the International Energy Agency (IEA) India Gas Report released on February 12 in India Energy Week.
The city gas distribution (CGD) sector is expected to lead this growth supported by the rapid expansion of compressed natural gas (CNG) infrastructure and the cost advantage of gas over liquid fuels for small industrial users.
Heavy industrial and manufacturing sectors, such as iron and steel production, are also driving demand, collectively adding around 15 bcm/yr during this period, the report said. Additionally, gas usage in oil refining is expected to increase by more than 4 bcm/yr as more refineries get connected to the grid.
However, as the report suggested, growth prospects in the petrochemical and fertiliser sectors remain limited, as no new gas-based capacity additions are foreseen within the forecast period.
Gas demand in the power generation sector is projected to reach nearly 15 bcm/yr by 2030, led by a recovery in large gas-fired power plants and the rapid expansion of gas use in captive power plants.
The IEA report highlighted the untapped potential of compressed biogas (CBG) production, with annual output expected to reach 0.8 bcm by 2030.
India's domestic gas production, which met 50% of demand in 2023, is expected to grow only moderately through the forecast period. After almost a decade of stagnation, domestic gas production has seen a resurgence. "In 2023, total net gas production reached 35 bcm, meeting about half of the country's gas demand, said the report.
This growth is primarily driven by the deepwater fields in the Krishna-Godavari basin. However, overall growth will be tempered.
Implementing targeted strategies and introducing policy interventions are expected to boost gas consumption beyond the forecasted trajectory to around 120 bcm/yr by 2030 which is close to the current gas consumption of the entire South America.
