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India’s liquefied natural gas purchases are set to more than double by 2030 as infrastructure expansion and modest growth in domestic production prompt a jump in consumption, according to the International Energy Agency.
Demand for the super-cooled fuel from the world’s fourth-largest buyer will rise to an annual 64 billion cubic meters by 2030, up from 36 billion last year, according to the IEA’s latest report on the Indian gas market, published on Wednesday. That represents an annual growth rate of 11% until the end of the decade, twice the average rate seen in the last 10 years.
The increase, part of an overall rise in demand from transport, industrial consumers and refineries, will help gas producers and liquefaction plant developers from UAE to the US, who have invested billions in new supply.
“India’s gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction,” the IEA’s Director of Energy Markets and Security, Keisuke Sadamori said in a statement.
“The prospect of higher gas demand in India coincides with an expected wave of new global LNG supply. However, it will require careful planning and market coordination to ensure supply security and to help gas to compete in a price-sensitive market.”
Modi wants the share of gas in India’s energy mix to climb to 15% by 2030, up from around 6% today — a level that has remained static for about a decade.
Gas has not kept up with otherwise rapid energy demand growth because India has prioritized affordability and security, according to IEA. A lack of pipelines has been a hindrance too. Better prices and infrastructure, however, should boost the role of gas in the wider mix.
India’s gas imports will be supplemented by local production, which will meet half of the country’s demand by 2030. After a decade of stagnation, the IEA finds homegrown output has improved, though with some existing fields aging, production in 2030 will be only 8% above last year.
Total gas consumption for the world’s most populous nation will jump by roughly 60% to 103 bcm the end of the decade, the IEA said. Targeted infrastructure, policy intervention and affordable prices could help push it to 120 bcm — roughly the same as the whole of South America today. That’s still short of Modi’s goal of doubling the share of gas in the energy pie.
BloombergNEF has also forecast a significant increase in Indian gas consumption, as the highly price sensitive market benefits from increased supply after 2027, plus the network expands and refineries begin to use more gas. LNG imports are set to increase by 47% by 2030 from last year, according to BNEF, with faster growth seen from 2027.
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