India, the world’s fourth largest liquefied natural gas (LNG) importer, is expanding its natural gas infrastructure by adding 24 million tonnes per annum (mtpa) of capacity accounting for around 20 per cent of the total regasification capacity being added in Asia Pacific.

As per the latest annual report of the Gas Exporting Countries Forum (GCEF), India will be the world’s largest growth market for natural gas in the next decade with China claiming the top spot till 2030.

The GECF report pointed out that Asia-Pacific boasted of around 566 MTPA of regasification capacity in 2022, with a significant 82 per cent primarily situated within the legacy JKT (Japan, South Korea, Chinese Taipei) group, constituting 64 per cent and China with 18 per cent. The rest, comprising South and Southeast Asia, contributed to the remaining 18 per cent.

Among these, Japan leads with 210 mtpa , followed by South Korea (139 mtpa ), China (100 mtpa) and India (40 mtpa).

“In 2022, construction was underway for approximately 121 mtpa of regasification capacity in Asia Pacific, with China (74 mtpa ) and India (24 mtpa ) taking the lead. China represents around 60 per cent of the capacity under construction, while India is responsible for roughly 20 per cent of the ongoing development of regasification infrastructure,” it added.

Asia Pacific is projected to remain the dominant long-term LNG import market.

“China is poised to be the largest growth market this decade, but India is expected to assume that role after 2030. South and Southeast Asia are forecast to be the markets with the highest incremental LNG import growth, albeit from a lower base,” the report anticipates.

Expanded capacity

India’s gas demand is forecast to be met via expanded gas pipeline and LNG regasification capacity. Estimations indicate that Indian LNG imports could double, reaching 39 mt by 2030, and rise to 80 mt by 2040 and 105 mt by 2050.

“Realising such an outcome necessitates substantial investment in both supply and distribution infrastructure. By 2050, it is anticipated that India will increase its regasification capacity by 75 mtpa, reaching a total of 115 mtpa , which marks a significant rise from the existing capacity of 40 mtpa,” GECF said.

India is actively targeting a 15 per cent increase in the share of natural gas in its energy mix by 2030. This goal is to be achieved through the expansion of pipeline networks, construction of LNG terminals, and support for domestic production.

However, the GECF report said that despite a robust government ambition for natural gas to reach 15 per cent, the target is “unlikely to be met”.

Gas production

Natural gas production in India has been on an upward trajectory since 2020, surging from 24 billion cubic meters (bcm) to 35 bcm in 2023. A significant portion of this increase is attributed to offshore production, accounting for over 70 per cent of the overall production growth.

Introduced in 2016, the Hydrocarbon Exploration and Licensing Policy (HELP) sought to enhance India’s upstream sector regulations, attract foreign investment and expedite exploration activities.

This initiative introduced revenue-sharing contracts (RSC) as a replacement for conventional Production Sharing Contracts (PSCs). The shift aimed to streamline operations, address challenges such as cost recovery and stimulate increased exploration opportunities, ultimately enhancing the country’s upstream activities.

These reforms have fostered greater international participation in India’s upstream sector. For instance, Reliance Industries (RIL) and BP, have brought three offshore fields into production since 2020. The R-series commenced production in 2020 followed by the Satellite Cluster in 2021 and most recently, the MJ field. BP estimates that, at their peak, these fields are to collectively produce 10 bcm to meet domestic demand in India, GECF noted.

Oil and Natural Gas Corporation (ONGC) is planning to boost its natural gas production by 25 per cent by 2025 from 2022 level through intensified exploration. In recent developments, ONGC announced the discovery of a gas field in the Mumbai basin and an onshore discovery in the Krishna Godavari basin, it added.

“We anticipate that India is expected to achieve a natural gas production level of 50 bcm by 2050, with 95 per cent of this production originating from offshore projects,” the report anticipates.