IEA Releases India Gas Market Report

February 14, 2025

The International Energy Agency (IEA) recently released the report titled “India Gas Market Report: Outlook to 203”. It revealed that India’s natural gas demand is expected to grow by 60% by 2030, reaching 103 billion cubic meters (bcm) annually, making it one of the world’s largest consumers. After slow growth for over a decade, gas demand grew by over 10% in 2023 and 2024, marking a turning point.

Factors Driving Consumption Growth

Infrastructure expansion (more gas pipelines and CNG stations).
Rising domestic gas production.
Improvement in global gas market conditions.
Heavy industries, particularly iron and steel manufacturing, are also contributors, collectively adding approximately 15 bcm per year.

Infrastructure Development

India has seen substantial growth in infrastructure related to natural gas. Since 2019, the number of CNG stations has nearly quadrupled, and residential gas connections have more than doubled. The transmission pipeline network has expanded by 40 per cent. The IEA predicts that by 2030, both CNG stations and residential connections will nearly double again, with the gas transmission grid expanding by an additional 50 per cent.

Domestic Production vs. Imports

Despite the rising demand, domestic production of natural gas is not keeping pace.
In 2023, domestic production met only 50 per cent of the country’s demand.
It is projected to grow gradually to just under 38 bcm by 2030.
In contrast, LNG imports are expected to more than double to around 65 bcm annually to satisfy the increasing demand.
The IEA reports that LNG imports increased by 10 per cent in 2023 and 2024, following a decline in 2022.

Global Market Dynamics

The anticipated increase in India’s gas demand aligns with a global wave of new LNG supply. However, careful planning and market coordination are essential to ensure supply security. The gap between contracted LNG supply and projected requirements is expected to widen after 2028. This situation could leave India vulnerable to the volatility of the spot LNG market unless additional contracts are secured.

Future Outlook

The IEA’s report suggests that targeted strategies and policy interventions could further boost gas consumption, potentially reaching around 120 bcm per year by 2030. This would place India’s gas consumption close to the current levels of the entire continent of South America. The growth in infrastructure and demand indicates shift towards natural gas as a primary energy source in India.

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