India’s imports of liquefied natural gas (LNG) rose by more than 27 per cent y-o-y in CY24 on the back of rising consumption for sectors such as city gas distribution (CGD), power and industries.
According to the Petroleum Planning and Analysis Cell (PPAC), India imported around 37,336 million standard cubic meters (MSCM) in 2024 with monthly in-bound cargoes hitting a record during July (3,689 MSCM), October (3,626 MSCM) and May (3,516 MSCM).
LNG imports during December 2024 were flat m-o-m on a provisional basis at 3,022 MSCM. However, on an annual basis the imports rose by over 18 per cent.
Compared to 2022 (CY), LNG imports by the world’s fourth largest importer grew by 39.4 per cent from 26,779 MSCM.
Analysts and industry insiders attribute the growth in imports, after considering the hottest on record to lower prices of LNG in global market compared to 2022, to rising industry consumption, growing acceptance of LNG as the best transition fuel and government’s mandate to gas-based power plants to run at optimum capacity during the year to meet the growth in electricity demand.
During 2024, LNG imports averaged at 3,111 MSCM, compared to 2,445 MSCM and 2,232 MSCM during 2023 and 2022, respectively.
As of November 2024, LNG imports account for almost 51 per cent (50.9) of India’s total requirement of natural gas.
Rising consumption
India’s cumulative natural gas consumption rose by almost 13 per cent y-o-y to 66.36 billion cubic meters (BCM). December 2024 usage data has not been updated.
During April-November in FY25, gas consumption grew by 10 per cent y-o-y to 48.7 BCM. India consumed 67.5 BCM and 60 BCM during FY24 and FY23, respectively.
The International Energy Agency (IEA) has revised upwards the growth rate in India’s gas demand to 8.5 per cent from 7 per cent y-o-y in 2024 calendar year. Similarly, the Gas Exporting Countries Forum (GCEF) predicts usage to grow at 6 per cent y-o-y.
Fitch Ratings expects India’s total natural gas consumption to rise by around 10 per cent in FY25 (7M FY25: 11 per cent). Consumption rose by 11-14 per cent in the CGD, refinery and petrochemical segments in 7M FY25.
Increasing demand from key end-user sectors, policy measures supporting the use of gas as it is cleaner than traditional fuels, and rising natural gas production and LNG imports will support this growth, it added.
“We expect LNG imports to increase by around 20 per cent in FY25 (7M FY25: 22 per cent). This will be driven by increasing demand and lower international gas prices that will improve affordability for price-sensitive sectors. The faster growth in LNG imports than domestic production will continue to increase India’s imported LNG dependency (7M FY25: 51 per cent and FY24: 47 per cent),” it said.