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India’s natural gas demand rises by 6pc in 2023

  • Märkte: Natural gas
  • 22.01.24

India's natural gas demand rose by 6pc on the year to 64bn m³ in 2023, leading to a rise in domestic gas output and imports to reflect the government's aim of making the country a gas-based economy.

LNG imports rose by 7pc on the year to 29bn m³ last year, with India's import dependency at 44pc of its natural gas consumption, preliminary oil ministry data show. Production also rose by 6pc on the year to 35bn m³.

Rising power demand fuelled India's LNG imports. Power companies imported 2.32bn m³ of LNG in 2023, making up around 9pc of total imports and up by 76pc on the year, oil ministry data show. Domestic gas sourcing by power companies also rose by 7pc on the year to 6.5bn m³. India's biggest gas consumers are the power and fertilizer sectors.

Indian coal- and gas-based power utilities are running at optimum capacity following the end of the monsoon season after September. The power ministry has extended the validity of its earlier directives to utilities to raise coal imports and has also asked gas-based utilities to operate at full capacity to meet an anticipated rise in power demand in the coming months.

Gas makes up 6pc of India's installed power generation capacity, while coal accounts for 50pc. Natural gas is mostly used in India's gas distribution network via piped natural gas in households and compressed natural gas for automobiles.

Delhi has outlined plans to make the country a gas-based economy, with the share of natural gas in its primary energy mix targeted to rise to 15pc by 2030 from around 6pc in 2022.

Sectoral demand

City gas distribution companies benefited from the government's priority allocation for domestic gas, securing 10.2bn m³, up by 26pc on the year.

The sector's LNG imports fell sharply by 36pc on the year to 2.3bn m³, oil ministry data show.

The government has floated its 12th bidding round for expanding city gas distribution coverage, which connects the northeast and Jammu and Kashmir areas to India's natural gas pipeline network. Currently, a gas pipeline network spanning about 23,500km is under operation in the country and around 12,000km of pipelines are approved and under construction.

LNG imports by the fertilizer sector also rose sharply by 34pc on the year to 17bn m³, while its domestic gas sourcing fell by 38pc on the year to 3bn m³.

It remains to be seen how India's LNG demand pans out this year as the government continues to support gas use to move away from more carbon-intensive fuels such as coal, as part of its efforts to cut CO2 emissions, targeting net zero emissions by 2070.


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