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Net imports of natural gas by India, the world’s fourth largest importer of liquefied natural gas (LNG), is expected to grow at an average of 4.9 per cent annually between 2022 and 2050, the US EIA said.
The higher imports are on account of rising demand from the industrial sector, particularly fertilizers and oil refineries. India imported 31.028 BSCM of LNG in FY22, 26.304 BSCM in FY23 and 22.856 BSCM in FY24 (April-December), per government data.
The US Energy Information Administration (EIA) expects India’s domestic natural gas production and imports will help meet the growth in consumption of natural gas.
“We expect India’s net natural gas imports to grow even faster than domestic production, increasing from 3.6 billion cubic feet per day (Bcf/d) in 2022 to 13.7 Bcf/d in 2050, a 4.9 per cent average annual increase,” it noted.
India’s geography heavily affects access to both its natural resources and to its natural gas imports. The country does not import natural gas via pipeline, partially due to deserts and mountains forming much of its northern border. As a result, domestic production and LNG imports remain the primary sources of its natural gas supply, the agency explained.
Natural gas up
The US EIA has projected that India’s natural gas production is expected to nearly triple from 3.3 Bcf/d in 2022 to 9.1 Bcf/d in 2050 — a 3.7 per cent average annual increase.
The country’s net production, excluding flare gas and loss of natural gas, stood at 33.131 BSCM in FY22, 33.664 BSCM in FY23 and 26.685 BSCM in FY24 (April-December).
“Most domestic production in India, about two-thirds in 2019, is from offshore production fields. India uses a complex pipeline infrastructure to link offshore natural gas production and LNG imports that arrive at coastal import terminals to the rest of the country,” the agency said.
Because LNG and domestic production share similar geographical constraints, US EIA’s projected split of India’s natural gas supply coming from net imports and domestic production is heavily affected by the cost and availability of the two supply options, it added.
Consumption of natural gas
US EIA’s International Energy Outlook 2023 projects natural gas consumption to more than triple in India by 2050. “We project annual growth of 4.4 per cent over that period, more than twice the 2 per cent annual growth rate of natural gas consumption in China, the next-fastest-growing country,” it had said.
The world’s third largest energy guzzler consumed 64.159 billion standard cubic meters (BSCM) of natural gas in FY22, 59.969 BSCM in FY23 and 49.541 BSCM in FY24 (April-December).
The US government agency expects India’s industrial sector — in particular, ammonia production intended to decrease fertilizer imports — as well as a growing oil refining sector will drive most of the growth in natural gas consumption over the projection period.
In 2022, the US EIA pointed out that 7 Bcf/d of natural gas was consumed across residential, commercial, industrial, transportation, and electric power sectors in India. Of which, the industrial sector accounted for more than 70 per cent of the total consumption, followed by electric power sector at 17 per cent.
“By 2050, we project natural gas consumption to rise in India to 23.2 Bcf/d. Among India’s five consuming sectors, we project the industrial sector’s share of natural gas consumption will grow the most, rising to 80 per cent of total consumption, followed by the transportation sector rising to 10 per cent,” it added.
It also projects that natural gas consumption in oil refining will grow “significantly” to keep up with India’s domestic demand for refined oil products. Between 2022 and 2050, it expects natural gas consumption to grow by more than 250 per cent for production of basic chemicals and by more than 400 per cent for refining.
“We expect the two industries together to account for approximately 79 per cent of India’s industrial natural gas demand in 2050,” it added.
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