The Organization of the Petroleum Exporting Countries (OPEC) in its latest world oil outlook has projected that the share of natural gas in India’s total energy mix will reach 10.6 per cent by 2045 compared to the government’s target of 15 per cent by 2030.

According to the Petroleum and Natural Gas Regulatory Board (PNGRB), India’s current share of gas in the energy mix stands at 5.78 per cent.

OPEC’s projections are close to those made by bp in its last annual outlook. “The share of natural gas in total primary energy grows in all scenarios, increasing from 5 per cent in 2019 to 7-11 per cent in 2050, supported by industry and heavy road transport demand,” the 2023 bp Energy Outlook report said.

However, the OPEC report notes that natural gas is also expected to expand strongly in the medium- and long-term in the world’s fourth largest liquefied natural gas (LNG) importer.

Increasing the share of gas in the mix will help to reduce coal usage, curb CO2 emissions, and support the deployment of intermittent renewables, such as wind and solar.

City gas distribution

Furthermore, the government supports the gasification of the country (City Gas distribution), which aims to reduce the usage of traditional cooking fuels in the residential sector, it added.

“India is active in the continued gasification of its energy system. Expanding city gas distribution (CGD) systems are set to increase gas usage in the residential and commercial sectors. Gas can help reduce the traditional use of biomass, as well as potentially substitute some liquefied petroleum gas (LPG) demand,” the report projected.

The country’s CGD sector, which at present consumes around 35 million standard cubic meters per day (MSCMD) of gas, is expected to consume around 150 MSCMD by 2028.

LNG-powered vehicles

The OPEC report projected that the initiatives that encourage natural gas vehicles may bring additional support. Currently, players such as Essar Group-led GreenLine are offering LNG-powered trucks for long-range heavy-haul logistics, which is more affordable and environment-friendly compared to diesel.

Assuming its strong long-term competitiveness, the report expects gas to play a more important role in power generation. India’s gas-fired installed power capacity is close to 18 gigawatts (GW), which is in general operated at a plant load factor (PLF), or capacity utilisation, of less than 20 per cent in the last 2-3 years due to high LNG prices.

“Currently, India’s gas-powered power plants are used sub-optimally due to a lack of (domestic) gas supplies and have the potential to be ramped up in the future. In the Reference Case, India’s gas demand more than triples in the outlook period, reaching levels of 4.1 million barrels of oil equivalent per day (mboe/d) in 2045,” it added.