India’s natural gas demand to rise 60% by 2030: IEA

India’s natural gas demand is forecast to increase by nearly 60% by 2030 putting the country’s projected gas demand on a par with some of the world’s largest consumers, the International Energy Agency (IEA) said.

The agency released its report on India gas market outlook to 2030 during the India Energy Week here. According to the report, the country’s gas consumption is set to reach 103 billion cubic metres (bcm) annually by the end of the decade. “Following over a decade of slow growth and periodic declines, India’s natural gas demand increased by more than 10% in both 2023 and 2024, indicating an inflection point,” it said.

Infrastructure development is playing a crucial role in enabling the country’s market growth. Since 2019, India has almost quadrupled its number of compressed natural gas (CNG) stations and more than doubled the number of residential gas connections, while extending its transmission pipeline network by 40%. IEA expects the number of CNG stations and residential connections to nearly double again by 2030, with the gas transmission grid expanding by an additional 50%.

The city gas distribution sector is expected to lead consumption growth in India between now and 2030, supported by rapid CNG infrastructure expansion and competitive pricing against liquid fuels. The 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, as per IEA’s projections. The country’s domestic gas production, which met 50% of demand in 2023, is projected to grow gradually, reaching just under 38 bcm by 2030, at around 8% above 2023 levels. 

“The limited growth in domestic supply means India’s LNG imports will need to more than double to around 65 bcm a year by 2030 to meet rising demand,” said the report. The country is looking to increase the share of gas in its energy mix from current 6% to 15% by 2030.  “The report identifies 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 South America,” IEA said, adding it would require additional policy support to drive higher utilisation of gas-fired power plants, faster adoption of LNG in heavy-duty transport, and more rapid expansion of city gas infrastructure.

However, amid rising demand, the country needs 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,” said the agency.