India is poised for a major transformation in its energy sector, with natural gas demand expected to surge nearly 60% by 2030. According to the latest report from the International Energy Agency (IEA), this substantial rise will position India alongside the world's top gas consumers. The "India Gas Market Report: Outlook to 2030" forecasts an annual gas consumption of 103 billion cubic meters (bcm) by the decade's end.
After a period of modest growth and fluctuations, India's natural gas demand saw a notable rise of over 10% in both 2023 and 2024. This period marks a significant shift for the country's energy outlook.
Total Gas Consumption
The current landscape shows that while 2023's gas consumption only slightly exceeded 2011 levels, several elements are driving future growth. Key contributors include extensive infrastructure expansion, revitalized domestic production, and anticipated improvements in global gas market conditions.
"India's gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction," stated Keisuke Sadamori, IEA Director of Energy Markets and Security. He added that market coordination and strategic planning are essential to secure supply and enhance gas's competitiveness in a cost-sensitive market.
Infrastructure Development
This infrastructure boom is expected to propel the city gas distribution sector's growth
Infrastructure is a pivotal factor in this anticipated growth. Since 2019, India has almost quadrupled its network of compressed natural gas (CNG) stations and more than doubled its residential gas connections. The transmission pipeline network has also seen a 40% increase.
Projections for 2030 suggest that the number of CNG stations and residential connections will nearly double again, with the transmission grid expanding by an additional 50%. This infrastructure boom is expected to propel the city gas distribution sector's growth, offering a competitive alternative to liquid fuels.
India’s Domestic Gas Production
Heavy industry and manufacturing are predicted to add approximately 15 bcm of demand, while oil refining's gas use is set to grow by over 4 bcm as more refineries integrate into the network. Domestic gas production, satisfying half of the demand in 2023, is set to rise to just under 38 bcm by 2030, reflecting an 8% increase over 2023 levels.
To bridge the gap left by domestic supply growth, India's LNG imports will need to more than double, reaching around 65 bcm annually by 2030 to accommodate increasing demand.
Gas-Fired Power Plants
The report underscores the importance of strategic planning in LNG procurement
The report underscores the importance of strategic planning in LNG procurement and import infrastructure. With a push to increase gas's share in the energy mix, an accelerated scenario could drive total demand to around 120 bcm by 2030, paralleling current consumption in South America.
This scenario would necessitate enhanced policies to bolster gas-fired power plant usage, expedite LNG adoption in heavy-duty transport, and accelerate city gas infrastructure expansion.
Key Findings
As legacy contracts expire, India faces a potential gap between contracted supply and anticipated demand post-2028, raising exposure risks to market volatility unless new long-term agreements are reached soon. These insights are part of the key findings presented at India Energy Week in Delhi on February 12.
India's natural gas demand is forecast to increase by nearly 60% by 2030, a new IEA report finds, marking a significant shift in the country's energy landscape and putting India’s projected gas demand on a par with some of the world’s largest consumers.
The report, India Gas Market Report: Outlook to 2030, shows the country’s gas consumption is set to reach 103 billion cubic meters (bcm) annually by the end of the decade.
Following over a decade of slow growth and periodic declines, India’s natural gas demand increased by more than 10% in both 2023 and 2024, indicating an inflection point.
Total gas consumption
While total gas consumption in 2023 was only marginally higher than 2011 levels, three key factors are now converging to drive substantial growth: rapid infrastructure expansion, recovering domestic production, and an expected easing of global gas market conditions.
"India's gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction," said IEA Director of Energy Markets and Security Keisuke Sadamori.
"The prospect of higher gas demand in India coincides with an expected wave of new global LNG supply. However, it will require careful planning and market coordination to ensure supply security and to help gas to compete in a price-sensitive market."
Infrastructure development
Since 2019, India has almost quadrupled its number of compressed natural gas (CNG) stations
Infrastructure development is playing a crucial role in enabling market growth. Since 2019, India has almost quadrupled its number of compressed natural gas (CNG) stations and more than doubled the number of residential gas connections, while extending its transmission pipeline network by 40%.
By 2030, the number of CNG stations and residential connections is expected to nearly double again, with the gas transmission grid expanding by an additional 50%.
The city gas distribution sector is expected to lead consumption growth in India between now and 2030, supported by rapid CNG infrastructure expansion and competitive pricing against liquid fuels.
India’s domestic gas production
The heavy industry and manufacturing sectors are expected to add around 15 bcm of demand during this period, while gas use in oil refining is forecast to increase by more than 4 bcm as more refineries connect to the network.
India’s domestic gas production, which met 50% of demand in 2023, is projected to grow gradually, reaching just under 38 bcm by 2030. This would put it around 8% above 2023 levels.
The limited growth in domestic supply means India's LNG imports will need to more than double to around 65 bcm a year by 2030 to meet rising demand.
Gas-fired power plants
The report emphasizes the need for strategic planning in LNG procurement and import infrastructure
India is looking to increase the share of gas in its energy mix and the report identifies potential for even higher growth under an accelerated scenario, where targeted policy measures could push total demand to approximately 120 bcm by 2030 – comparable to the current gas consumption of South America.
This scenario would require additional policy support to drive higher utilization of gas-fired power plants, faster adoption of LNG in heavy-duty transport, and more rapid expansion of city gas infrastructure.
Looking ahead, the report emphasizes the need for strategic planning in LNG procurement and import infrastructure.
Key findings
As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility unless new long-term contracts are secured in the coming years.
The key findings of the report are being presented at India Energy Week in Delhi on 12 February.
