India’s gas revolution: new investment to fuel growth and ensure affordability

As we convene at Gastech 2024 in Houston, it is imperative to recognize the transformative developments unfolding in India’s energy landscape. While India is projected to remain a key driver of global oil demand for the next two decades, the nation’s energy strategy equally emphasizes the growing importance of natural gas in its evolving energy matrix. The nation is making significant strides towards establishing itself as a global hub for natural gas investments, supported by comprehensive policy reforms and large-scale infrastructure expansion. This dual focus on both oil and gas underscores India’s dedication to securing a balanced, resilient energy future that addresses both economic growth imperatives and environmental sustainability goals.

Process reforms to incentivize natural gas stakeholders
India’s ambitious target of doubling its natural gas consumption to 15% of the primary energy mix by 2030 represents more than just a numerical goal. It signifies a strong commitment to providing cleaner, affordable, and reliable energy for every citizen. The Government of India has allocated a substantial investment of $67 billion over the next five years. This comprehensive initiative aims to significantly enhance the country’s energy ecosystem, focusing on three key areas: expanding the natural gas pipeline network, increasing LNG import capacity, and extending clean cooking fuel access to millions more households.

The ambitious plan includes extending the natural gas pipeline network to over 34,500 kilometers by 2025, a strategic move that will vastly improve gas distribution across the country. Notably, India’s LNG import capacity has exhibited remarkable growth, more than doubling since 2014 to reach 47.7 Million Metric Tonnes Per Annum (MMTPA). This upward trajectory is set to continue, with plans to add another 19 MMTPA by 2030, bringing the total capacity to an impressive 66.7 MMTPA.

Reforms driving sector growth
India has not only focused on expanding infrastructure but has also implemented wide-ranging reforms to enhance the sector’s attractiveness for both domestic and international stakeholders. The introduction of the Administered Pricing Mechanism (APM) for natural gas in 2023 has been instrumental in providing pricing stability by linking gas prices to the Indian Crude Basket. This initiative, combined with price floors and ceilings, ensures a predictable business environment for all stakeholders. Incentives for exploration and production (E&P) operators are also stimulating investment in domestic production. The decision to allow gas from new wells in nomination fields to command 20% higher prices has catalyzed interest from operators, resulting in higher production levels. India’s natural gas production has already surpassed 36.4 billion cubic meters (BCM) in FY 2023-24, with further projections to reach 45.3 BCM by 2026.

The LPG revolution: a testament to India’s commitment
India’s Pradhan Mantri Ujjwala Yojana (PMUY), launched in 2016, has been a transformative initiative in clean energy access. LPG coverage, which stood at 62% at
the program’s inception, is now approaching national coverage. The World Health Organization (WHO) has commended PMUY for significantly improving indoor air quality, while the International Energy Agency (IEA) recognized the program as a major achievement in reducing household air pollution.

Building a robust base for sustainable gas economy
Beyond LPG, India’s natural gas expansion continues with a robust city gas distribution (CGD) network, enabling a larger number of households to access piped natural gas (PNG) and compressed natural gas (CNG). Over the past decade, the number of PNG connections has increased exponentially from just over 2 million to more than 12 million, while the CNG network has expanded from 900 stations to over 6,000 today. Furthermore, India’s “One Nation, One Grid, One Tariff” policy is revolutionizing natural gas access. By rationalizing pipeline tariffs, gas is becoming more affordable in previously underserved regions, supporting balanced regional development and creating a fair and sustainable market for natural gas consumption.

Positioning India as a natural gas trading hub
India is not content with merely being a large consumer of natural gas. By operationalizing the Indian Gas Exchange (IGX) in 2020, India has positioned itself as a transparent, market-driven natural gas trading hub. The exchange has created a robust pricing mechanism for both domestic and international players and is poised for significant growth as gas demand continues to surge.

India Energy Week 2025: showcasing innovation
As we look to the future, India Energy Week (IEW) 2025 invites the global energy community to witness India’s rapid progress. It is with great anticipation that I extend an invitation to the delegates of Gastech 2024 to participate in IEW 2025, where India will unveil the next wave of energy innovations and opportunities.