IEA: India’s natural gas demand to grow by 6% in 2024.

India’s natural gas demand is projected to increase by 6% in 2024, driven by higher consumption in the fertiliser units, power generation, and industrial sectors, according to the International Energy Agency (IEA). After a 7% decline in 2022, India’s primary gas supply rose by 5% in 2023, primarily due to growth in the petrochemical, power generation, refinery, and industrial sectors. The IEA’s Gas Market Report states that the increase in natural gas demand is supported by the development of India’s national pipeline grid and city gas infrastructure. In 2023, India’s natural gas demand reached 64 billion cubic meters, while liquefied natural gas (LNG) imports rose by 7% to 29 billion cubic meters. The nation’s import dependency for natural gas stood at 44% of total consumption. Additionally, India’s domestic production of natural gas increased by 6% to 35 billion cubic meters, driven by increased output from Reliance Industries’ KG-D6 block. The IEA predicts a 7% increase in LNG imports in 2024, fueled by demand from the power and fertiliser sectors. India intends to stop importing urea by 2025. The country relies on natural gas extracted from below the surface and seabeds for various purposes, including fertiliser production, electricity generation, automobile fuel (CNG), household cooking, and industrial fuel and feedstock. However, India’s domestic production falls short of meeting demand, so LNG is imported through cryogenic ships. Power companies imported 2.32 billion cubic meters of LNG in 2023, accounting for approximately 9% of total imports and showing a 76% increase from the previous year. In November 2023, India approved the mandatory blending of compressed biogas into the domestic gas supply, with the mandate starting at 1% of total compressed natural gas and piped natural gas consumption from 2025, gradually increasing to 5% by 2028-29. The IEA also highlighted India’s advancements in gas market reforms, including the introduction of a unified pipeline tariff system and the consideration of establishing strategic gas reserves for enhanced supply security. The Petroleum and Natural Gas Regulatory Board (PNGRB) implemented the Unified Tariff (UFT) policy in April 2023, aiming to create a more stable, competitive, and transparent pricing regime for natural gas transport across the country. The UFT policy covers a network of 21 pipelines, representing approximately 90% of pipelines in operation or under construction. The IEA further noted that India approved a National Green Hydrogen Mission in January 2023, targeting a production of at least 5 million tonnes per year of green hydrogen by 2030, with the potential to reach 10 million tonnes and expand export markets. The mission includes financial incentive schemes to support domestic manufacturing of electrolysers and green hydrogen production, with an initial outlay of around USD 2.4 billion.

According to the International Energy Agency (IEA), India’s natural gas demand is projected to increase by 6% by the year 2024. This surge in demand is driven by various factors such as the government’s push for cleaner fuel alternatives, industrial growth, and rising energy consumption. Meeting this increased demand will require further investment in infrastructure and exploration activities to ensure a stable supply of natural gas.

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