New Delhi: The International Energy Agency (IEA) forecasts a 6% increase in India’s natural gas demand for the year 2024. This surge is attributed to heightened consumption in key sectors such as fertilisers, power generation, and industries, as revealed by the IEA Gas Market Report released last week.
After experiencing a 7% year-on-year decline in 2022, India witnessed a 5% rise in primary gas supply in 2023. The growth was primarily driven by the petrochemical, power generation, refinery, and industrial sectors.
The report highlighted that the expected growth in natural gas demand in 2024 is primarily driven by increased usage in industries, especially in the fertiliser sector, and a stronger presence in the power sector. This uptick is facilitated by the ongoing development of India’s national pipeline grid and city gas infrastructure.
India’s natural gas demand had reached 64 billion cubic meters in 2023. Liquefied natural gas (LNG) imports rose by 7% to 29 billion cubic meters, accounting for 44% of the nation’s natural gas consumption. The IEA anticipates a 7% increase in LNG imports in 2024, driven by demand from the power and fertiliser sectors, aligning with India’s goal to cease urea imports by 2025.
India, facing domestic production shortages, imports LNG to meet its demand. The power sector, which imported 2.32 billion cubic meters of LNG in 2023, is a significant contributor, representing approximately 9% of total imports.
In November 2023, India approved the mandatory blending of compressed biogas into the domestic gas supply, aiming to reach 1% by 2025 and gradually increase to 5% by 2028-29.
IEA also commended India’s progress in gas market reforms during 2023. The introduction of the Unified Tariff (UFT) policy in April 2023 for natural gas transport aims to create a consistent and fair tariff structure across 21 pipelines, covering around 90% of pipelines in operation or under construction.
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